Treatment of shareholders’ unclaimed dividends under the companies Act 2019, (Act 992)

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The writer, Frederick Gurah Sampson Esq.


Businesses, whether Limited Liability Companies, Sole Proprietorships, Partnerships, etc in Ghana like elsewhere exist with the aim of maximizing profit. Shareholders or persons who invest in such business by way of shares have an expectation that the company will keep being a going concern, make a profit and declare dividends for the benefit of the shareholders or to be reinvested into the business for the growth and development of the business.

Ordinarily, the declaration or payment of such dividends is one that shareholders actually look forward to and one would have thought the phenomenon of unclaimed dividends is unusual. It however appears there are instances where the Company will declare dividends yet these dividends will be unclaimed by the respective shareholders for one reason or the other.

In this piece, the author shall explore the phenomenon of Unclaimed Dividends, the reasons why that happens, and discuss how the law treats them under the current legal regime.

Prior to the coming into force of the Companies Act 2019 (Act 992) (the current Act), there was no express provision in the Companies Act 1963 (Act 179) with its amendments (the old Act) for how Unclaimed Dividends of shareholders were treated. This left it to be treated as a debt owed by the company to the Shareholder in favour of whom the dividend was declared.

This implies that if dividends are declared and remained unclaimed under the previous legal regime, it became a debt, for which the shareholder could ordinarily recover from the company without any hindrance, subject possibly to the Statutes of Limitation.

Unclaimed Dividends arise when a company has declared dividends in accordance with law and is ready to pay the same to shareholders but the shareholders have not claimed the same or the company has been unable to pay the dividends to these shareholders. Several reasons could account for this phenomenon including but not limited to, the death of the shareholder without notification to the company, lack of knowledge by relatives of shareholders of the interest or shares in the company, and wrong addresses of shareholders.

There are other reasons like an insignificant amount of such dividends hence lack of interest of shareholders in claiming or following up on them, some Shareholders may have travelled and left the country without any notice or change of address to the company. These among other reasons make it difficult or impossible for the company that has lawfully declared dividends to make such payments to the shareholders entitled.

The treatment of the phenomenon of Unclaimed dividends is one of the new introductions in the Companies Act 2019 (Act 992). Under the new law, if dividends remain unclaimed for a period of three (3) months, the law commands the company to immediately open an interest-bearing unclaimed dividend account into which shall be credited the amount unclaimed.

Section 73 (1) of the Act provides in that regard thus “Where any dividend declared by a company cannot be paid by reason of the dividends being unclaimed by the member entitled to the dividend and remains unclaimed for a period of three months, the company shall forthwith (a) open an interest bearing unclaimed dividend account, and (b) credit to that account the total amount of the unclaimed dividend of its shareholders unless that account has already been opened.”

After opening the said account and crediting the said account, if the dividend remains still unclaimed for a further period of twelve months, the law requires that the company transfers the amount to the registrar who shall open an account and pay the same to it.

Section 73(2) provides that “Where payment of the dividend cannot be made or is not claimed within a further period of twelve months after the transfer made under paragraph (b) of subsection (1), the company shall pay to the Registrar the total amount of the unclaimed dividend plus interest accrued on that account.”

Subsection 3 further provides that “The Registrar shall pay into the account under subsection (4) (the amount received under subsection (2), and (b) the amount received under subsection (3) of section 74.”

Per section 73(4), “The Registrar shall with the approval of the Board open an interest bearing bank account for the safe keeping of monies received from any company under subsection (2)”. When the registrar receives the amount, section 73(5) makes the registrar responsible for the money lodged and disbursed from the interest-bearing account.

When the company is making the payment to the Registrar, the Company must notify the respective shareholders or their estate as the case may be at their last address known to the company. Section 73(6) in that regard provides that “The company shall on the date of the payment under subsection (2), notify the respective shareholder or the estate of the shareholder at the last address known to the company of the payment made in respect of the dividend.”

The shareholder or the estate upon a show of requisite evidence is entitled to make a claim for the dividend in the issue. This implies that if the shareholder is deceased, the Administrators or the Executors as the case may be can lay a claim to the Registrar or company for the unclaimed dividends.

Section 73(7) provides that “The shareholder or the estate of the shareholder shall on providing satisfactory evidence, be entitled to make a claim for the dividend and any accrued interest during the period that the (a) company and possession of the dividend under subsection (1); and (b) Registrar had possession of the dividend under subsection (3).”

This places a duty on the Registrar to publish annually in the Companies Bulletin and in a daily newspaper of national circulation the details of all such shareholders whose dividends remain unclaimed and have been transferred to the Registrar for safekeeping.

Management and Disposal of Unclaimed Dividends

If after all the above processes, the dividends still remain unclaimed, for a period of seven years, the law mandates the Registrar after the expiration of seven years to transfer 50% of the said dividend to the Consolidated fund and donate the other 50% to specified purposes. Section 74(1) provides that, “The Registrar shall keep unclaimed dividends lodged in the account under subsection (4) of section 73 for seven years.”

The seven-year period, therefore, becomes a limitation period after which the shareholder or the estate of that shareholder cannot lay claim to the dividends, more so when the dividends are disbursed as provided under subsection 2 of section 74.

Under section 74(2) “The Registrar shall on the expiration of the seven-year period referred to in subsection (1) (a) transfer to the Consolidated Fund fifty percent of the total amount of money lodged in the interest bearing account under subsection (4) of section 73, and (b) donate or apply fifty percent of the total amount of money lodged in the interest bearing account under subsection (4) of section 73 for the purpose of investor education, research, entrepreneurial development and advancement of company law.”

So essentially once the Registry has transferred the unclaimed dividends in the manner under section 74, the door is closed for any claims to be made by any shareholder or the estate of such shareholder. The law, therefore, gives a lot of window of opportunity for any such person to claim any unclaimed dividend the person may be entitled.

In conclusion, it is suggested that even though unusual, when dividends are unclaimed, the new legal regime provides for how the same will be treated.

Shareholders who have not been claiming or not claimed dividends declared by their companies will therefore do well to follow up and lay claim to them before they are estopped by law from doing so in seven years after 2019.

Shareholders must therefore take note of this new provision and be guided or forfeit their entitlement to those dividends from August 2026.