There are many misconceptions about the business terrain in Ghana. The most evident one has to do with company formation.
It is not without doubt that most corporate institutions prefer contracts with corporate entities than individuals. Corporate entities give the contracting party the comfort of dealing with an institution which is a going concern and not an individual whose demise is likely to affect the operation of the terms of the contract.
This article highlights the basic requirements and knowledge for individuals who desire to form companies with ease need.
Name and Nature of Business
The first step in registering a company is to get a name for the company, the name must be unique, not misleading or undesirable (in the opinion of the Registrar) nor have been used by any other person before the registration. A search can be conducted at the Registrar Generals Department (RGD) to confirm whether the said name has already been taken.
Upon confirming the name, the applicant must be clear on the nature of the business. The nature of business simply means the purpose for which the company is created whether the business is created for services, manufacturing, transport among other things. There should be certainty and precision on the principal activities. The nature of the business can always be amended to include more so just be brief on the reasons why you intend to create the business.
Tax Identification Number (TIN) for Directors, Shareholders, and Company Secretary
All officers of the proposed company must have a Tax Identification Number(“TIN”). If an officer does not have a TIN, the TIN application takes between 3 to 5 working days to obtain at the Ghana Revenue Authority ("GRA"). The applicant must provide his/her name, occupation, Photo ID, mother's maiden name, residential and postal address (digital/postal address) and contact details of the applicant
Appointment of Directors
Legally, you can include as many directors as you want upon incorporation. The only proviso is that it should not be less than two individuals.
Each of the directors must provide their residential address, business occupation, postal, electronic mail address as well as contact details of the directors must be provided. as well as indicate whether they are Ghanaian nationals or foreign entities (proof of which will be required).
Appointment of Company Secretary
Currently, a person must either be a chartered accountant, or a lawyer licensed to practice as a lawyer before they can serve as secretaries to countries. Among other things, the duties of the secretary will include compliance with the company’s constitution, filing of statutory forms as well as register.
A corporate entity can also be a company secretary by the requirements of the company law
Registered and or Principal Place of Business
An applicant must indicate the address of the house or building he intends to carry out business. The street, district, city, and region preferably the digital address must be provided. If the applicant has other places of business, it must be included as well. The postal address must be included as well as the telephone details of all the proposed contacts of the company.
Shareholders or Members of the Company
This is a critical issue all applicants must consider in the process of registering a company, the shareholders are the owners of the company. They make the decisions for and on behalf of the company. There can be one shareholder or several shareholders. The company as a whole must be specific on the total number of shares the company intends to subscribe (Authorised Shares) to and how many shares each applicant wants to subscribe it intends to subscribe to (“Issued Shares”).
The Applicant must also take into consideration the share capital it intends to invest in the company. It usually includes total consideration (cash) the applicant intends to obtain from the sale of shares as well as the total consideration received for every issue of shares otherwise than for cash. It, however, depends whether the applicant intends to go into the service industry or trading industry
- Service Industry: For Ghanaian companies, the applicant is required to pay a stamp duty fee of 0.5% of the share capital to the RGD. However, if the entity is wholly owned by a foreign entity minimum $500,000.00 If the entity is jointly owned between a Ghanaian and foreigner, the stated capital shall be $ 200,00.00 but the Ghanaian applicant must have 10% equity participation
- Trading Industry: importers, dealers in general goods and retail trading, manufactures will require a minimum of $ 1,000,000.00 (Cedi Equivalent) in equity. Where there is Ghanaian participation the person must have 10% in equity participation. The applicants will be required to pay 0.5% as stamp duty on the stated capital at the time of incorporation
Registration with Ghana Investment Promotion Centre (GIPC)
Where the company is wholly or partially owned by a foreign entity, it will be required to produce evidence of registration with the GIPC. This is necessary to regulate the capital investments made by the entity in the country.
Business Registration Certificates
Upon successful incorporation, the applicant will be presented with the under listed information
- Certificate of Incorporation and Certificate of Commencement of Business
- Company Regulations
- Form 3 and 4
Company formation has become relevant in our evolving world and it is incumbent on any person who intends to enter into long term businesses to incorporate one.