Who declares and pays the dividend?

The directors declare a dividend, calculate the amount to be paid and decide when it is to be paid. This process is governed by the Constitution or Articles of the company and the Corporations Act, all of which give the necessary powers and guidelines on the process and on shareholder's entitlements.

Section 254U of the Corporations Acts sets out this original power:

(1) The directors may determine that a dividend is payable and fix:
(a) the amount; and
(b) the time for payment; and
(c) the method of payment.
The methods of payment may include the payment of cash, the issue of shares, the grant of options and the transfer of assets.