Shareholding & Dividends¶
Last reviewed: 2026-03-31 · Nnamdi
Status: Complete
Route: /dividends
1. What is it?¶
The Shareholding & Dividends module manages the ownership structure of a business and records dividend distributions to shareholders. There are two parts: Shareholders (who owns what percentage of the business) and Dividends (declarations of profit distributions, calculated automatically based on ownership percentages). WHT of 10% is automatically deducted from each dividend payment and needs to be remitted to FIRS.
2. How does it work in Finora?¶
The /dividends page has two tabs: Shareholders and Dividends.
2.1 Shareholders tab¶
KPI cards: | Card | What it shows | |------|--------------| | Total Shareholders | Count of all registered shareholders | | Total Ownership Allocated | Sum of all ownership percentages (should equal 100%) | | Remaining | Unallocated ownership percentage (Target: 0%) |
Table columns: - Name — shareholder's full name - Email — email address (used to send dividend notifications) - Ownership % — their percentage stake in the business - Bank — bank name for dividend payment - Actions — Edit / Deactivate
Sample data (test business): | Name | Email | Ownership % | Bank | |------|-------|-------------|------| | Nnamdi Wakwe | nnamdi@finorabusiness.com | 50% | GTBank | | Eric Okafor | eric@finorabusiness.com | 30% | Access Bank | | Ada Obi | ada@finorabusiness.com | 20% | Zenith Bank |
Adding a shareholder¶
Click Add Shareholder. A panel appears:
| Field | Required | Notes |
|---|---|---|
| Name | Yes | Shareholder's full name |
| Yes | Used for dividend notification emails | |
| Phone | No | Contact number |
| Ownership % | Yes | Their percentage stake (all shareholders must total 100%) |
| Bank Name | No | e.g. GTBank |
| Account Number | No | 10-digit NUBAN account number for dividend payment |
| Account Name | No | Bank account holder name |
Actions: Cancel / Add Shareholder
2.2 Dividends tab¶
KPI cards: | Card | What it shows | |------|--------------| | Total Dividends Declared | Count of all dividend declarations | | Total Amount (This Year) | Sum of all dividend declarations in the current year | | Total WHT | Total withholding tax deducted on dividends this year |
Search: by dividend number
Header action: - Declare Dividend — opens the declaration form
Table columns: - Number — auto-assigned (e.g. DIV-2025-00001) - Declaration Date — date the dividend was declared - Total Amount — gross dividend before WHT - WHT (10%) — withholding tax deducted (always 10%) - Net Payable — amount actually paid to all shareholders after WHT - Status — Declared / Paid / Void - Actions — Paid / Void
Expanded row — clicking the expand icon shows: - Board Resolution Date - Payment Date - Shareholder Allocations sub-table: Shareholder / Ownership % / Gross / WHT (10%) / Net Payable / Email Sent
Sample (DIV-2025-00001, 20 Dec 2025): | Shareholder | Ownership % | Gross | WHT (10%) | Net Payable | |-------------|-------------|-------|-----------|-------------| | Nnamdi Wakwe | 50% | ₦250,000 | ₦25,000 | ₦225,000 | | Eric Okafor | 30% | ₦150,000 | ₦15,000 | ₦135,000 | | Ada Obi | 20% | ₦100,000 | ₦10,000 | ₦90,000 | | Total | 100% | ₦500,000 | ₦50,000 | ₦450,000 |
2.3 Declaring a dividend¶
Click Declare Dividend. A panel slides in:
| Field | Required | Notes |
|---|---|---|
| Total Amount (Naira) | Yes | The total gross dividend to be distributed across all shareholders |
| Board Resolution Date | Yes | Date the board passed the resolution to declare the dividend. Defaults to today |
| Declaration Date | Yes | Official declaration date. Defaults to today |
| Payment Date | No | Planned payment date |
| Board Resolution Document | No | Upload the board resolution approving the dividend |
After declaring: - Finora automatically calculates each shareholder's allocation based on their Ownership % - WHT of 10% is deducted from each allocation - Notification emails are sent to each shareholder's email address (Email Sent status tracks this)
Action buttons: - Cancel — discards - Declare Dividend — creates the dividend record and generates per-shareholder allocations
2.4 GL entries for dividends¶
On declaring a dividend: | Account | Debit | Credit | |---------|-------|--------| | 3xxx Retained Earnings / Dividends Declared | Total gross amount | — | | 2xxx Dividends Payable | — | Net payable (gross − WHT) | | 2027 WHT Payable | — | WHT amount (10%) |
The declaration reduces retained earnings and creates a liability to shareholders (Dividends Payable) and to FIRS (WHT Payable).
On paying shareholders: | Account | Debit | Credit | |---------|-------|--------| | 2xxx Dividends Payable | Net amount per shareholder | — | | 1020 Cash at Bank | — | Net amount per shareholder |
On remitting WHT to FIRS: | Account | Debit | Credit | |---------|-------|--------| | 2027 WHT Payable | WHT amount | — | | 1020 Cash at Bank | — | WHT amount |
3. Business rules & constraints¶
| Rule | Detail |
|---|---|
| Ownership % must total 100% | The "Remaining" KPI shows unallocated %. All must be allocated before declaring dividends |
| WHT on dividends is always 10% | FIRS mandates 10% WHT on all dividend payments in Nigeria — this is fixed and not configurable |
| Dividends auto-distributed by ownership % | Finora calculates each shareholder's gross and net amount automatically |
| Board resolution required | In law, dividends must be authorised by a board resolution — upload the document for audit trail |
| Email notifications sent per shareholder | Each shareholder receives a notification to their registered email when a dividend is declared |
| Dividend status transitions: Declared → Paid | Mark a dividend as Paid once the bank transfers have been made |
| Voiding is supported | A declared dividend can be voided before it is paid |
4. Nigerian regulatory context¶
Dividend taxation (CITA and ITA) - Dividends paid by Nigerian companies are subject to WHT at 10% at source - The paying company deducts WHT from each dividend payment and remits to FIRS by the 21st of the following month - Shareholders receive net dividends (90% of gross) and WHT certificates they can offset against their personal income tax liability - Filing WHT on dividend payments is done via Tax Management → WHT Returns
Dividends and retained earnings - Dividends can only legally be paid out of profits (distributable reserves / retained earnings) - Paying dividends when the company has no profits (or is in losses) is a violation of CAMA — directors can be personally liable - Finora records the dividend against retained earnings — if retained earnings are insufficient, this creates a negative retained earnings balance which should be escalated
Bonus shares vs cash dividends - Nigerian companies can issue bonus shares (stock dividends) instead of cash - Bonus share issues do not involve cash — the accounting moves amounts from retained earnings to share capital - Finora's current Dividends feature records cash dividends; bonus share issuances are not currently supported as a separate workflow
Dividend income and personal tax - For individual shareholders, dividend income is taxable personal income under the Nigeria PIT Act - WHT deducted at source serves as a tax credit against the shareholder's personal income tax - For corporate shareholders, dividend income from domestic companies may be exempt from CIT (subject to conditions)
5. Common customer questions¶
Q: "How does Finora calculate each shareholder's dividend?"
Finora distributes the total declared amount proportionally by ownership percentage. E.g., if you declare ₦500,000 and Shareholder A owns 50%, they receive ₦250,000 gross (₦225,000 net after 10% WHT).
Q: "Do I need to deduct WHT on dividends?"
Yes. Nigerian law requires WHT of 10% on all dividend payments. Finora automatically deducts this. You must remit the total WHT to FIRS via a WHT Return (Tax Management → WHT Returns) by the 21st of the month after the dividend is paid.
Q: "A shareholder's ownership percentage changed. How do I update it?"
Click Edit on the shareholder's row in the Shareholders tab and update the Ownership %. Ensure the total for all shareholders still equals 100% after the change. Historical dividends are not retroactively recalculated.
Q: "Why am I getting an error when the ownership total exceeds 100%?"
The system requires that all shareholding percentages sum exactly to 100%. Check the existing shareholders' percentages before adding a new one — reduce existing allocations as needed.
Q: "I declared a dividend by mistake. Can I reverse it?"
Yes, use the Void action on the dividend row. Voiding a dividend reverses the accounting entry. A voided dividend cannot be un-voided — a new declaration would need to be made.
6. Known edge cases¶
Ownership not totalling 100%¶
If shareholders are set up with ownership percentages that do not add up to 100%, the "Remaining" KPI shows the gap. Dividends may not calculate correctly until the full 100% is allocated.
Paying dividends from insufficient retained earnings¶
Finora does not block declaring a dividend that exceeds available retained earnings. The GL will record the debit against retained earnings regardless, potentially creating a negative balance. This is legally problematic — escalate to Tier 2 for guidance.
Bonus shares¶
If a business wants to issue bonus shares instead of a cash dividend, there is no dedicated flow. This must be handled as a manual GL journal entry (Tier 3 only).
WHT remittance after dividend payment¶
Declaring a dividend in Finora creates the WHT Payable liability, but the actual WHT Return filing (remittance to FIRS) must be done separately in Tax Management → WHT Returns. Businesses may forget this step — the WHT Payable account will remain on the Balance Sheet until the WHT Return is filed and marked as paid.
7. Escalation trigger¶
Escalate to Tier 3 (Founder) if: - GL entries on dividend declaration are incorrect (wrong accounts or amounts) - Retained earnings balance after dividend declaration does not match expectations - Shareholder allocation amounts don't match the expected ownership % calculation - Bonus share issuance needs to be recorded
Escalate to Tier 2 (Support Lead) if: - Business wants to pay a dividend but retained earnings are insufficient - Shareholder structure needs to be changed significantly (restructuring, new investors) - Business unsure how to file the WHT Return for dividends paid
8. Last reviewed¶
2026-03-31 — Nnamdi. Verified against production. Shareholders tab: 3 shareholders in test business (Nnamdi 50%/GTBank, Eric 30%/Access Bank, Ada 20%/Zenith Bank), totalling 100%. Add Shareholder form captured. Dividends tab: 1 historical record DIV-2025-00001 (Dec 2025, ₦500,000 total → ₦50,000 WHT → ₦450,000 net, Status: Declared). Shareholder allocation breakdown confirmed (per ownership %); Email Sent flag confirmed per shareholder. Declare Dividend form: Total Amount, Board Resolution Date, Declaration Date, Payment Date (optional), document upload. KPIs note: "Total Amount (This Year)" shows ₦0 because DIV-2025-00001 was in Dec 2025 (prior year).