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 New York, as in other states, the payment of dividends is governed by corporate law. The decision to distribute dividends is typically made by a company's board of directors and can be issued to all shareholders or specific classes of shareholders, depending on the company's type of stock and its corporate bylaws. Dividends can be paid out in cash or in the form of additional stock. The frequency of dividend payments can be regular, such as quarterly or annually, or they can be special dividends issued on a non-recurring basis. The New York Business Corporation Law (NYBCL) provides the regulatory framework for the distribution of dividends, ensuring that such distributions do not violate the company's articles of incorporation or jeopardize the company's financial stability. Companies must ensure that dividends are paid from their surplus (the excess of net assets over stated capital) or, in some cases, out of net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. It is important for companies to comply with these regulations to maintain corporate solvency and protect the interests of creditors.