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 Kansas, as in other states, the payment of dividends by a company is governed by state corporate law as well as the company's own articles of incorporation and bylaws. Under Kansas law, specifically the Kansas General Corporation Code, a corporation can distribute dividends to its shareholders out of its surplus (the amount by which the company's assets exceed its liabilities and stated capital) 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. The board of directors has the discretion to determine the amount and timing of dividend distributions, as well as whether the dividends will be paid in cash, additional stock, or other property. However, dividends cannot be paid if doing so would render the corporation insolvent or unable to pay its debts as they become due. The board's decision to pay dividends must also comply with any specific provisions or restrictions outlined in the company's articles of incorporation or bylaws. It's important for companies to carefully adhere to these regulations to ensure that dividend distributions do not adversely affect the company's financial stability or violate the rights of any class of shareholders.