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 Ohio, as in other states, the payment of dividends is governed by corporate law. Ohio Revised Code (ORC) Title XVII Corporations - Partnerships specifically addresses the distribution of dividends to shareholders. According to the ORC, a company's board of directors has the discretion to declare dividends out of the corporation's surplus or net profits if the corporation's capital is not impaired and the dividend would not impair the capital of the corporation. Dividends can be paid in cash, property, or additional 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 other strategic considerations. Regular dividends are usually paid on a scheduled basis (e.g., quarterly), while special dividends may be declared on a nonrecurring basis when a company has excess profits. It's important for companies to comply with state statutes and their own corporate bylaws when issuing dividends to avoid legal issues.