This checklist concerns the approvals, certificate and payment records for a distribution. The main dividend-tax guide explains the tax treatment of the shareholder. Main guide.
Establish the amount available
Review the relevant approved accounts and any necessary current financial information. Identify accumulated losses, prior distributions and restrictions affecting the proposed dividend. Reconcile the reserve being distributed and consider the company’s ability to meet its obligations.
For illustration, a €50,000 bank balance can include customer advances or borrowed money. It does not prove €50,000 of distributable profit. The accounting and legal analysis must come before the payment instruction.
Obtain the proper corporate approval
Check the articles and applicable law to determine who approves the particular distribution and what documentation is required. Record the amount, shareholders entitled, relevant dates and reserve allocation in the appropriate resolution.
Match ownership and share rights to the entitlement. Different share classes or a recent transfer may require additional examination. Do not assume equal payments to all people involved in the business are dividends simply because they are directors or founders.
Prepare the tax calculation and certificate
Confirm the recipient’s residence, individual or corporate status, domicile where relevant and any applicable withholding or GHS position. Identify the profit year and previous deemed-distribution tax where relevant. Keep the evidence supporting exemptions instead of relying on an informal verbal assertion.
The SDC Law requires a company dividend certificate stating the dividend, SDC withheld and year the profits arose. The profit-year ledger supports this record and the transitional treatment of older reserves.
Reconcile the payment and reporting
Match gross dividend, deductions and net payment to the bank and shareholder account. Retain tax submission and payment evidence separately from the bank transfer to the shareholder. Confirm that the ledger does not leave both a dividend payable and an unexplained director debit.
For a foreign corporate recipient, use the outbound-payment checklist. If the amount is actually a loan or remuneration, apply that classification and its documentation rather than changing the description after payment.