A dividend is a distribution to some or all shareholders of some portion of a company’s earnings—usually from its net profits. The profits retained by the company (and not paid as dividends) are known as retained earnings.

A company’s board of directors may decide to pay a dividend to one or more classes of shareholders, or to all shareholders. Dividends may be paid as cash or as additional stock. And dividends may be paid at a scheduled frequency or as a special dividend on a nonrecurring basis.

In Florida, as in other states, the payment of dividends is governed by corporate law. Florida Statutes Title XXXVI, Chapter 607, which covers corporations, provides the legal framework for dividend distributions by companies incorporated in the state. According to these statutes, a corporation's board of directors has the discretion to declare and pay dividends to shareholders out of the corporation's surplus or, if there is no surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. Dividends can be paid in cash, property, or additional shares of the corporation's stock, depending on the decision of the board. The frequency and amount of dividends are typically determined by the board of directors and may vary based on the company's profitability, financial needs, and strategic goals. Special dividends may also be issued on a non-recurring basis when the company experiences excess profits. It is important for corporations to comply with these regulations to ensure that dividend distributions do not impair the capital of the company, as Florida law prohibits distributions that would render the corporation insolvent.