Ghana’s Companies Act 2019, Act 992 – Business Registration in Ghana

1 Who can register a company in Ghana?

Section 6 of Ghana’s Companies Act 2019, Act 992 allows any individual or group of persons to register a company. Section 12, Act 992 adds that such individuals must be above 18 years of age.

2 Who is a promoter, and what are the duties of a promoter?

Under Section 10, Act 992, promoter of a company is defined as a person who is or who has been engaged or interested in the formation of that company; this is exclusive of persons rendering services to the company in their professional capacity hired by persons engaged in procuring the formation of a company.

Duties of a Promoter under Companies Act 2019, Act 992

The duties of said promoter include the following:

1. Stand in a fiduciary relationship to the company
2. Observe utmost good faith towards the company in a transaction with the company or on behalf of the company
3. Compensate the company for any loss suffered by the company because of the failure of the promoter to observe utmost good faith
4. Account for any properties, information, or profits arising from the use and acquisition of any properties or information that the promoter may acquire in circumstances in which it was his or her duty as a fiduciary to acquire said property or information on behalf of the company.

3 What are the requirements for the registration of a company in Ghana?

The following are the requirements of Section 13, of Act 992, in addition to the requirements in Section 14 of the old Companies Act 1963. It provides that all applications to register a company must include the following:

1. The name of the company and an indication of the type of proposed company;
2. The nature of the proposed business if the company is registered with an object;
3. The address of the proposed registered office;
   • Principal place of business of the company in Ghana
   • Telephone number and the post office box
   • Private mailbag or digital address of the registered office of the company
   • The electronic mail address and website of the company, if available
4. The following particulars of each subscriber;
   • Date, place of birth, and nationality
   • Present full name and any former name
   • Residential, occupational, postal, and electronic mail addresses and telephone contact.
5.  The following particulars of each proposed director of the proposed company:
   • Present full name and any former name;
   • Particulars of any business occupation and other directorships held by the director
   • Residential, occupational, postal, and electronic mail addresses and telephone contact
6. A statutory declaration by each proposed director of the proposed company indicating that within the preceding 5 years, he or she has not been;
   • Charged with or convicted of a criminal offense involving fraud or dishonesty;
   • Charged with or convicted of a criminal offense relating to the promotion, incorporation, or management of a company
   • Declared insolvent, or if that proposed director has been insolvent, the date of the insolvency and the particulars of that company

8. The consent of each proposed director
9. The following particulars of the proposed company secretary of the proposed company;

• Present full name and any former name
• Usual postal, occupational, and electronic mail address
• Residential address in the case of an individual; and
• Business occupation

10. The following particulars of the proposed auditor of the proposed company;

• Present full name and any former name;
• Postal and electronic mail addresses and telephone number;
• Residential address in the case of an individual;
• Consent of the auditor;

11. The following particulars of each subscriber for a proposed company with shares;

• Present full name and any former or other names
• Date and place of birth
• Telephone number
• Nationality and proof of identity
• Residential, postal, or email address, if any
• Place of work and position held

12. The following particulars of each owner of the proposed company;

• Full name and any former or other names
• Date and place of birth
• Telephone number
• Nationality, national identity number
• Passport number or other appropriate identification and proof of identity
• Residential, postal, or email address, if any
• Place of work and position held
• The nature of the interest including the details of the legal, financial, security
• Debenture or informal arrangement giving rise to the beneficial ownership
• Confirmation as to whether the beneficial owner is a politically exposed person

13. The following details in the case of a company that has shares;

• The amount of proposed stated capital
• The number of authorized shares of the company for each class

Additionally, the application must be endorsed with the signature of each subscriber if the company is registered with shares. The signature of the subscriber must be accompanied by name of the subscriber, the number of shares the subscriber takes, and the cash price payable for the shares.

According to Section 171, Act 992, at the time of incorporation, the proposed company should have at least 2 directors with one director ordinarily resident in Ghana.

4 When does the proposed company’s incorporation take effect?

According to Section 14, Act 992, the proposed company becomes a body corporate on the date of incorporation after payment of the prescribed fees and issuance of a certificate of incorporation to the company by the Registrar.

5 What rules guide company naming in Ghana?

According to the Companies Act 2019, Act 992, the last names of any company are as follows;

1. For a private company limited by shares, “Limited Company” or the abbreviation “LTD”
2. For a public company limited by shares, “Public Limited Company” or the abbreviation “PLC”
3. For a company limited by guarantee, “Limited by Guarantee” or the abbreviation “LBG”
4. For a private company unlimited by shares, “Private Unlimited”
5. For a public company unlimited by shares, “Public Unlimited Company” or the abbreviation “PUC”.

Further information on Company Naming

This naming convention differs from the corresponding provision in the old Companies Act 1963 which only catered for private companies.

As under the old Companies Act, 1963, the new Companies Act 2019, Act 992 gives the Registrar the power to refuse or deny registration of a company name if the said name is misleading or undesirable.

It must be noted that the proposed company is prevented from selecting names if the proposed name is the name of a company that has been dissolved within the preceding five years of the intended registration.

6 How can a company name be changed?

Company names may be changed by a special resolution together with the written approval of the Registrar, after which another certificate of incorporation shall all successful changes in name shall be advertised in the Companies Bulletin, the website of the Office of the Registrar of Companies, and in one daily newspaper published in the Republic and circulating in the district in which the registered office of the company is situated.

7 How can a company name be reserved in Ghana?

Like the old Companies Act 1963, the Companies Act 2019, Act 992 allows applicants to reserve a name for up to 2 months. The period of the reservation may be renewed for another period of 2 months on the expiration of the initial reservation period. While the name is under reservation, the Registrar may refuse to register company names that bear a semblance to the reserved name.

8 What is the minimum capital requirement to start a company in Ghana?

Under the new regime created by the Companies Act 2019, Act 992, the only capital requirements pertain to foreigners and foreign companies or ventures. This provision is captured under the Ghana Investment Promotion Centre Act (GIPC) 2013, (Act 865) as follows;

1. For a joint enterprise with a Ghanaian partner, the minimum capital requirement is US$200,000 or its equivalent in capital goods;
2. For a wholly foreign-owned enterprise, the minimum capital requirement is US$500,000 or its equivalent in capital goods;
3. For a trading enterprise, irrespective of whether it is wholly or partly owned by a non-Ghanaian, the minimum capital requirement is US$1,000,000. Additionally, the enterprise shall be required to employ at least 20 skilled Ghanaians.

9 Capital requirement for Ghanaian-owned private companies;

The old Companies Act 1963 had a minimum capital requirement of GHC500 for all Ghanaian-owned private companies limited by shares and GHC1000 for public companies. This requirement has, however, been removed by the Companies Act 2019, Act 992. As such the only capital requirements that exist, are in respect of foreigners and foreign enterprises.

Part 2 — How Company Directors are Appointed in Ghana under Companies Act 2019, Act 992

10 What qualifies someone to be a director of a company?

The Companies Act 2019, Act 992, stipulates that a person would not be appointed as a director of a company unless he or she has, before the said appointment, made a statutory declaration submitted to the company and subsequently filed with the Registrar to the effect that, he or she has not within the preceding 5 years of the application for incorporation been;

1. Charged with or convicted of a criminal offense involving fraud or dishonesty;
2. Charged with or convicted of a criminal offense relating to the promotion, incorporation, or management of a company
3. A director or senior manager of a company that has become insolvent or if the person has been, the date of the insolvency and the particular company;
4. He or she should have consented in writing to be a director and filed the consent within twenty-eight days.

11 What disqualifies someone from being the director of a company in Ghana?

Similar to the provisions under the old Companies Act, a person is disqualified or deemed incompetent to be a director if said person is;

1. An infant
2. A body corporate — a term broadly used to refer to a corporate entity that has a legal existence
3. Has been adjudged to be of unsound mind
4. Has been convicted either in Ghana or elsewhere of an offense involving fraud or dishonesty, an offense in connection with the promotion, formation or management of a body corporate, or an offense involving insider dealing, or of any other felonies subject to leave of the Court
5. An undischarged bankrupt under which he or she has not been granted leave by the Court – domestic and international – that made the declaration
6. Culpable of a criminal offense, whether convicted or not, in relation to a body corporate or of fraud or breach of duty in relation to a body corporate subject to leave of the Court
7. Seems to be debarred by the competent authority from being a member of a recognized professional body as the result of a disciplinary inquiry subject to leave of the Court
8. Is the subject of an ongoing investigation by a criminal investigating body or by the Registrar or the equivalent in a foreign jurisdiction subject to leave of the Court.

12 What Temporarily disqualifies Someone from being the Director of a Company?

Also, a person is automatically disqualified for appointment as director or to act as a director of a company for 5 years if he/she has;

1. Been convicted within the last 5 years of an offense involving fraud or dishonesty, or relating to the promotion, formation, or running of a company
2. Has been a director or senior executive of a company that has become insolvent within the last five years on account of or partly as a result of the culpable activities of that director
3. Has been disqualified to act as Company Secretary, receiver, manager, or liquidator of a company.

If a person previously disqualified under the above is subsequently subject to a second conviction, that person shall be automatically disqualified for 10 years. If said person is convicted a third time, he/she shall be permanently disqualified as a director or to act as a director.

Part 3 — Appointment of Company Auditors

13 How Company Auditors are Appointed in Ghana under Companies Act 2019, Act 992

Lastly, the following are the qualifications of a company auditor under the new Companies Act 2019, Act 992;

1. He or she must first be qualified and licensed by the Chartered Accountants Act, 1963 (Act 170)
2. He or she should subsequently not be;

• An officer of the company or an associated company
• A partner of, or in the employment of an officer of the company or of an associated company
• An infant
• Found by a court of competent jurisdiction to be a person of unsound mind
• A body corporate, however, an incorporated partnership may be appointed as an auditor in name and the appointment shall be deemed to be an appointment of the partners of the firm who, at the time of the appointment, are duly qualified.
• Convicted either in Ghana or elsewhere of an offense involving fraud or dishonesty, an offense in connection with the promotion, formation or management of a body corporate, or an offense involving insider dealing, or of any other felonies subject to leave of the Court
• An undischarged bankrupt under which he or she has not been granted leave by the Court (domestic and international) that made the declaration
• Culpable of a criminal offense, whether convicted or not, in relation to a body corporate or of fraud or breach of duty in relation to a body corporate subject to leave of the Court
• Seems to be debarred by the competent authority from being a member of a recognized professional body as the result of a disciplinary inquiry subject to leave of the Court
• For the time being, disqualified from actin as an auditor of a company by order of the Registrar.