• Legislation

• Registration Procedure

• Commencement of Business

• Registration of Sole Proprietor Business

• Registration of Partnership

  • Advantages and Disadvantages of Partnership

• Registration of Co-operative Societies

• 12 Steps of Registration for a Company Limited

  • Advantages and Disadvantages of Incorporation

Legislation   [top]
An entrepreneur can set up a business enterprise in Ghana in accordance with the provisions of any of the following legal instruments and following prodedures (Laws are not available online; only for sale with the Ghanaian Government):

• Companies Code, 1963 (Act 179)
  Contents: Right to form a company. Types of company. Duties to promoters. Formation of companies. Names of companies. Company's regulations. Capacity of companies. Commencement of business. Membership of companies. Shares. Stated capital and dividends. Accounts and audit. General meetings. Directors and secretary.

• Incorporated Private Partnerships Act, 1962 (Act 152),
  Contents: Registration of partnership firms. Nature of the firm. Mortgages and charges. Accounts.

• Registration of Business Names Act, 1962 (Act 151),
  with regard to unincorporated business.
  Contents: Persons to be registered. Procedure and time for registration. Penalties. Regulations. Commencement.

   

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Registration   [top]
Application for registration of a company is made directly, or through agents or solicitors, to the Registrar-General. A company is duly registered after the company's regulations have been submitted to the registrar of companies and a certificate of incorporation issued. A specified fee is paid on presentation of the regulations. The information required includes:

• The name of the company with the word "Limited" as the last word in the name;

• The nature of the company's business;

• A statement that the company possesses all the powers of a natural person of full capacity;

• The names of the first directors of the company;

• A statement that the liability of the company is limited;

• The share capital and its division into shares of n° par value;

• Limitation on the power of the Board of Directors in accordance with section 202 of the Companies Code;

• Any other lawful provisions relating to the constitution and adminstration of the company.

The requirements for a public company limited by shares are similar to those stated above, except that the public can buy shares.

 
Commencement of Business   [top]
Before commencing business, further information on the company must be provided. This includes the particulars of the company and a declaration of compliance. The particulars of the company are given on Form N°. 3 and signed by the directors and the company secretary. The information provided must include:

• Name of company;

• Authorized business;

• Particulars of directors (at least two) and a secretary;

• Name and address of auditors;

• Addresses of the company's registered office and principal place of business;

• Address at which the register of members is maintained;

• Amount of stated capital, number of authorized and issued shares, amount paid (other than cash) and amount due for each lass.

The declaration of compliance is made on Form N°. 4. This states that the conditions of section 28 of the Companies Code pertaining to a minimum capital issue of 25,000 cedis has been paid and signed by all directors and the secretary of the company. There is a stamp duty of 0.2 per ent of capital issue payable. Upon due completion and presentation of the forms, the registar issues the company with a certificate of commencement of business.

Annual Returns. Limited Liability Companies must file annual returns with the Regsirat of Companies showing their audited balance sheet and profit-and-loss statement after 18 months of incorporation.

 
Registration of a Sole Proprietor Business  [top]
The registration procedure for a sole proprietor business is less complicated and costly than for a company limited. The sole proprietor must register at the Registrar-General's Department and fill the following forms:

Registration of Business Name (Form A, 5 copies): Business name; General nature of business; Principal place of business; Full address; All other place at which business is carried out; Nationality; civil status; Date of commencement of the business. The business must have commenced before registration is effected. Each proprietor is required under the Registration of Business names Act to renew the registration of the business once every year.

If the name consists merely of the sole proprietor's surname without any additions apart from all his true personal name or names or his initials, registration is not required.

Tax Identification Number for Individuals, Sole Proprietor Regsitration Form to get the Tax Identification Number (TIN): Name, Birth information (date, town, region, sex); Nationality; Full address; Occupation; Business name; Business location and full address; Business activities; Registrar General's N°.

 
Registration of a Partnership Business  [top]

A partnership is an arrangement whereby two or more persons combine some or all of their resources, skills or industry with the objectif of making profit which will be shared by the partners.

Forms of Partnership are non-trading partnership, commercial partnership, limited partnership.

Non-Trading Partnership
Firms of Lawyers, Chartered Accountants, Architects and other professional practioners.

Commercial or General Partnership
All partnerships engaged in trading, manufacturing and other commercial activities.

Limited Partnership
This is a special type which is very rar. A limited partnership consists of general and limited partners. A limited partner is liable to the firm or its creditors to the amount of the capital he has agreed to contribute, but not more. He may share in the profits according to the partnership agreement, but must take no part in the management of the business or he becomes a genral partner.

Partnership Agreement
It is customary for the partners to execute a signed agreement covering such matters as the purpose of the busines, name of the firm, duration of the agreement, place of business, capital to be contributed by each partner, division of profits ans losses, books of accounts, rights of management of partners, and procedure for termination or re-organization of the partnership.

Advantages of Partnership

• A partnership is a simple, flexible and inexpensive form of business organization.

• It is not subject to corporate taxes and is exempt from most of the statutory returns and forms which must be filed by limited companies.

• It is particularly suitable to service type of business that do not require too large investments and when there is no element in the business which may lead to the risk of serious personal liability.

Disadvantage of Partnership

• Should there be insufficient assets in the partnership to pay any claim against it, the partners are personally liable.

• As the business grows, the partnership organization becomes less suitable, and it is difficult to obtain investment capital for expansion.

• The partnership act limits the number of partners to 20. The duration of a partnership is uncertain as it may be terminated by death, bankruptcy or withdrawal of partner.

 
Co-operative Society  [top]

A Co-operative society is defined as a business voluntarily organized, operating at a cost, which is owned, capitalized and controlled bymember-patrons, sharing risks and benefits proportional to their participation.

Registration
The Registrar of Co-operatives is responsible for registration, liquidation and general development of Co-operative societies in accordance with the Co-operative Societies Degree, NLCD 252 of 1968. The Registrar as appointed by Governement is responsible to the Ministry of Co-operatives. He is also Head of the Department of Co-operatives.

Subject to the provisions of the Co-operative societies degree 252, any society which has as its object the promotion of the economic interests of its members in accordance with Co-operative principles may be registered with or without limited liabilities.

 
12 Steps for Business Registration
 of Companies Limited in Ghana  [top]
 The following information on business registration has been captured
 from Worldbank/IFC "Doing Business" http://www.doingbusiness.org

 Example of Private Limited Company. Minimum capital requirement
 of C5,000,000, depending on company activity

1. Check the availability of company name

2. Apply to Registrar-general

3. A Commissioner of Oaths authenticates forms

4. Obtain the certificate to commence business

5. Deposit paid in capital an account

6. Make a common seal

7. Apply for business license at the Metropolitan Authority

8. Inspection of work premises by the Metropolitan Authority

9. Register employment vacancies at the Employment centre

10. File employment contracts with employment centre

11. File for social security

12. Environment certificate

Advantages and Disadvantages of Incorporation  [top]

Advantages

• The shield of limited liability permits a person who invests in a venture to be assured that in any event he cannot loose more than the amount of capital he agreed to contribute.

• A crporation has many ways of raising capital by the issuance of share, while the partnership is restricted to loans or contribution by the individual members.

• The company having a legal existence apart from its shareholders, is not affected by bankruptcy, insanity or death of a shareholder or other events which would terminate a partnership.

• A shareholder may easily transfer his shaes (except in a private company) but a partner cannot transfer his interest without the consent of all partners.

Disadvantages of Incorporation

• The limited company is normally the most expensive form of business enterprise to organize and maintain.

• A limited company enjoys the least privacy because it is required ti file many statutory forms and returns to the government authorities.

• It must pay special corporation taxs and registration fees considerably greater than would a partnership doing the same business.

• Minority shareholders are at mercy of majority shareholders, because generally speaking, the rule of majority goes.

More on how to start up a business see Start your Business

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Business Development Services (BDS) - Ghana