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Are you dealing with a closely held corporation where all the shareholders are directors or just a regular board of directors? Is there any special agreement among the shareholders that allows shareholders to vote on issues such as dividends?
The Board of Directors is what makes decisions on dividends. One vote per director. In a small closely held corporation, the directors make the decision as a practical matter and it is based on the vote of holders of a majority of the shares. Only if there is a specific agreement among shareholders that alters these basic procedures do different rules apply. Even though the bylaws say dividends are payable if the Board in its discretion do not believe that would be in the best interest of the corporation, it would be difficult to get a court to over ride that decision if it had any reasonable basis.
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