Articles L232-18 and L232-19 of the Code de commerce govern stock dividends. These articles specify the conditions and procedures for this form of distribution.

Article L232-13 of the Code de commerce stipulates that a cash dividend must be paid within a maximum of nine months following the end of the fiscal year. This period allows companies to finalize their accounts and ensure the availability of funds.

Article L232-19 of the Code de commerce stipulates that the shareholder has a maximum of three months after the general meeting to exercise the stock dividend option. This period allows shareholders to make an informed decision.

Distributable earnings are defined as net income reduced by prior losses and amounts allocated to reserves under the law or the articles of association, increased by retained earnings brought forward. This definition is crucial for determining the share of earnings that may be distributed to shareholders.

Article L232-18 of the Code de commerce indicates that stock dividends must be previously provided for in the articles of association and approved by the general meeting. This provision ensures that all shareholders are informed and consent to this option.

Types of dividend distributions can be classified by their nature (ordinary, interim, special) and their form (cash, stock, in kind). This classification helps understand the different options available to companies.

A cash dividend is a cash payment of the share of profit allocated to each shareholder, proportional to their stake in the capital. It is governed by article 1844-1 of the Code civil and is the most common form of distribution to shareholders.

A special dividend arises on a one-off basis following extraordinary events and requires specific approval. It cannot be distributed without the accounts being approved by the general meeting, as it is an important decision that impacts the company's cash position and equity.