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 Rhode Island, as in other states, dividends are distributions of a company's earnings to its shareholders, which can be issued in the form of cash or additional stock. The decision to pay dividends, the amount, and the type are determined by the company's board of directors. Dividends can be paid out regularly, such as quarterly or annually, or as special, one-time distributions based on the company's financial performance and strategic decisions. The payment of dividends is subject to both state corporate law and federal securities regulations. Rhode Island corporate law requires that dividends be paid from surplus or net profits, and not out of the company's capital, to protect creditors and ensure the company's solvency. Companies must also comply with the terms of their charters and any other contractual obligations that may affect dividend distributions. It's important for companies to adhere to these regulations to avoid legal issues and to ensure fair treatment of all shareholders.