(a). Stated capital – sec 68 of Act 992:

• Total proceeds for shares issued for cash and amounts paid on calls without deductions for expenses and commissions.
• Total value of considerations received for shares issued for non-cash agreement.
• Total amount transferred from surplus to stated capital by special resolution, including the credit balance on share deals accounts.

(b). Unclaimed dividends – Sections 73-76 of Act 992:

• SECTION 73(2) Where declared dividends of a company remain unclaimed for a period of three (3) months, the company must:
  • Open an interest-bearing unclaimed dividend account.
  • Credit the unclaimed dividend into that account.
• Where payment of the dividends cannot be made for a further twelve (12) months after the transfer, the Company shall pay the unpaid dividends plus interest accrued to the Office of the Registrar.
• The Registrar shall open an interest-bearing account for such unclaimed dividends and shall annually publish details of shareholders whose dividends have been transferred to the ORC in the Companies Bulletin and Dailies SECTION 73(8).
• Registrar shall keep unclaimed dividends for seven (7) years.
• SECTION 74 provides that after the seven (7) years the Registrar shall:
  • Transfer fifty (50) percent of the amount in the interest-bearing account to the Consolidated Fund.
  • Donate / Apply fifty (50) percent of the funds for investor education, research, entrepreneurial development, and advancement in company law.
• SECTION 74(3) – Upon Commencement of Act 992, all unclaimed dividends must be immediately transferred to the Registrar for application of the section.
• SECTION 76(1) No changes to declaration of dividends but a time limit of 60 days has been placed on the payment.
• SECTION 75(1) Prohibitions of payment of dividends by LBGs still in effect.

(c).

• In the absence of any provisions to the contrary, no dividend shall be payable on any shares ranking after these shares until all the arrears of the fixed dividend have been paid.
• In a winding up, arrears of any cumulative preferential dividend, whether or not earned or declared, shall be payable up to the date of actual payment in the winding up.
• Any class of shares enjoying preferential rights to payment out of the assets of the company in case of dissolution shall not have any further right to participate in the distribution of assets in the winding up, unless the contrary intention appears in the Constitutions.
• In determining the rights of various classes to share in the distribution of the company’s property, on a winding up, no regard is to be paid to whether or not such property represents accumulated profits or surplus which would have been available for dividend while the company remained a going concern, unless there is something to the contrary.
• [Fifth point not explicitly provided in the document, but implied from context]: Preference shares typically have fixed dividends, while ordinary shares have variable dividends based on company profits.

(di).

• It is the BOD that recommends dividend amount to the shareholders’ approval by ordinary resolution at AGM-sec 76.
• Shareholders can agree on a lower amount than recommended by the BOD but not higher.
• The MD alone cannot decide on dividend amount per share or go by a proposal from a shareholder just to please the investors.
• The MD may convince the BOD to agree and recommend the amount being proposed by the investor for shareholders’ approval but cannot act unilaterally.
• Dividend payment must follow the company’s constitutions/dividend policy and Act 992.
• Dividend is paid from profit/retained earnings, not from a fund meant to pay maturing debts.
• Sec 72 prohibits such payments:
  • Except in winding up, no dividend, return, or distribution of assets to shareholders unless:
  • The company is able to pay its due debts after the payment or distribution.
  • The amount or value of such payment does not exceed its retained earnings immediately prior to the payment or distribution.
• The dividend payment cannot go ahead since it will violate the law.
• The company has no retained earnings to finance the payment.
• It cannot pay maturing debts next month if the fund is used to pay dividends.
• It will be in bad faith, failure to protect creditors, and results in further debts/interests.

(dii).

Legal implications:

• Every director in default shall be jointly and severally liable to restore the total amount distributed to the company with interest.
• If the directors fail to restore the amount with interest within twelve months after the date of distribution, shareholders shall be liable to restore the amount received.
• Shareholders shall indemnify the directors with the amount and interest if the directors restore the amount to the company.
• Any shareholder, officer, creditor, or the registrar can secure a court injunction to prevent the distribution and an order for restoration.
• The application shall be made in a representative capacity on behalf of himself and all the other shareholders or creditors, etc.