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 Minnesota, as in other states, the payment of dividends by a company is governed by state statutes and corporate governance principles. Under Minnesota law, specifically the Minnesota Business Corporation Act (Chapter 302A of the Minnesota Statutes), a corporation's board of directors has the authority to declare and pay dividends to shareholders out of the corporation's legally available assets. These assets are typically the company's current or retained earnings that are not required to pay debts. Dividends can be paid in cash, property, or additional shares of stock, depending on the decision of the board. The board must ensure that the payment of dividends does not render the corporation insolvent or unable to pay its debts as they become due. 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 declared on a non-recurring basis if the company has excess profits that it wishes to distribute. It's important to note that the rights and preferences of different classes of shares, as outlined in the company's articles of incorporation, can affect dividend distributions.