Maintain your records
Record preferred dividends, declarations, and payments
Record dated dividend terms on a preferred class in Cap Table, enter declarations and cash payments on a certificate, and reconcile the accrued balance.
On this page
Record the dividend terms on the class
Dividend terms belong to the preferred class, not to an individual certificate. Open Share classes, edit the preferred class, and open Participation cap and dividends. Select Append a dated cap or dividend amendment, then enter the Effective date and the Agreement reference identifying the charter or amendment the terms come from.
Select Record dividend terms and complete the fields below. The editor stays inert until the amendment checkbox is selected, so nothing typed under an unticked box is saved.
| Field | What it records |
|---|---|
| Annual rate (%) | The stated annual dividend rate, entered as a percentage such as 8 for 8%. |
| Accrual start | The first day the dividend accrues under this amendment. |
| Accrual end (optional) | The last day of accrual. Leave it blank for an open accrual window. An end before the start is refused with that reason. |
| Cumulative: dividends accrue whether or not declared | Selected for a cumulative dividend. Cleared for a non-cumulative dividend, which accrues nothing on its own. |
| Accrual convention | Simple, on the original investment or Compound, on the investment plus unpaid dividends. |
| On conversion | Forfeited or Kept as a cash claim at the class’s seniority for unpaid dividends when the class converts. |
| At liquidation | Added after the preference multiple or Included in the amount the multiple applies to. |
Amendments form a dated, append-only history. A later amendment changes results from its effective date forward and leaves earlier accrual as it was recorded. Only a participating class can carry a participation cap; a cap typed on a non-participating class is refused at the field.
Understand what the dividend accrues on
Each certificate accrues on its own original investment: the recorded economic basis, or its quantity multiplied by its issue price when no basis was recorded separately. The certificate’s dividend section states the amount and the date, for example Dividends accrue on $1,000,000 invested on January 1, 2024, through every split and transfer.
Simple accrual is principal × rate × years. Compound accrual is (principal + unpaid balance) × ((1 + rate)years − 1), so a payment resets what compounds. Years are actual elapsed days divided by 365, the same day count the app uses for convertible note interest. Accrual is segmented at every amendment date, accrual start and end, and cash event, and each segment is priced by the terms in force at its start.
A stock split restates share quantities, not the money that was invested. The principal and its date follow the certificate through splits and through proportional transfers, so a reverse split does not rewrite the dividend basis.
Record a declaration or a payment
Declarations and payments are recorded on the certificate, because that is what the cash was paid on. Open Securities, edit the preferred share certificate, and find Dividend history.
- Select Record a dividend declaration or payment.
- Choose the Dividend event: Declared dividend or Payment of accrued or declared dividends.
- Enter the Dividend event date and the Dividend cash amount in the company currency.
- Enter the Dividend evidence, such as the board resolution or the payment record.
- Save the security. The event is appended to the certificate’s dividend history.
The fields appear only on a certificate issued into a preferred class that carries dividend terms. On any other certificate the section explains what is missing instead of accepting an entry the save would refuse. Record the class terms first.
Reconcile the balance and read the refusals
Accrued, declared, and paid amounts produce the balance still owed. A declaration adds to the balance; a payment reduces it on its date. A declaration and a payment recorded on the same day settle in that order, whichever was entered first.
A payment larger than the balance on its date is refused, because it would record the payment of a dividend that was never owed. The check allows half a cent of tolerance: accrual is fractional while payments are made in cents. For example, 366 days at 8% on a $1,000,000 basis accrues $80,219.178, so an $80,219.18 wire clears the balance and $80,219.19 is refused.
A non-cumulative dividend accrues nothing on its own. Its balance comes only from declarations recorded on the certificate, so a board declaration is the event to record, not a rate left to run.
Read the dividend claim in the exit model
In Exit scenarios, a class carrying dividend terms shows its dividend claim beside its preference, and a per-class card named how the dividends were calculated lists each certificate: the principal it accrues on, the amounts accrued, declared, and paid, the balance owed at that exit, and each dated segment with its rate and convention. Use it to reconcile the modeled claim to the charter.
The exit’s Model date is the date dividends accrue to. Unpaid dividends follow the recorded At liquidation and On conversion choices. A cap table that carries these terms alongside an unconverted SAFE is refused with the reason; model and close that conversion first. Dividends do not mint shares, and recording them does not pay anyone.