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Ghana: Getting a Limited Liability Company Registered in Ghana, from Application to Certification

Introduction

Ranked as one of the most stable political environment within the West African sub-region, Ghana is one of the viable places for doing business, and one of the fastest growing economies in the world. Ghana has become a mainstay for individuals seeking to set up their businesses into the West African sub-region.

In view of the above, we can say that, Ghana has become an attractive country for investment through established corporate entities. To that extent, individuals seeking to set up companies, particularly limited liability companies in Ghana need to be abreast with the processes and procedures.

This article, therefore, seeks to highlight the various processes involved in registering a company in Ghana, particularly a limited liability company, right from application to certification.

A company operating in Ghana must be registered in line with the laws governing company incorporation. The relevant statutory body, that is the Registrar of Companies is the first step to acquiring the status of an artificial person, a corporate entity with the capacity to transact in its corporate name, sue and be sued, among others.

Section 6 under the Companies Act, 2019 (Act 992) states that one or more persons may form an incorporated company.

Again, Section 12 of the Act clearly states that, a person of the age of eighteen years and above may apply for the incorporation of a company.

The two main legislation that governs the establishment of companies in Ghana are the Companies Act, 2019 (Act 992) and the Ghana Investment Promotion Centre Act 2013 (Act 865).

An incorporated company may either be

  1. A limited liability company
  2. An unlimited liability company
  3. A company limited by guarantee
  4. An external company

A limited liability company: A limited liability company is a company that has the liability of its members limited to the amount unpaid on the shares respectively held by them. The company cannot offer its shares to the general public. It is a popular form of company structure in Ghana limiting the day to day running of the company to the company’s board of directors.

Processes for Registering a Limited Liability Company

First and foremost, Section 171 of the Companies Act, 2019 (Act 992) states that, a company incorporated and registered in Ghana must have at least two directors, one being ordinarily a resident in Ghana. By virtue of Section 173 (1) of the Companies Act, 2019 (Act 992), the following persons are not qualified to be appointed or to act as directors of a company.

  1. An infant
  2. A person adjudged to be of unsound mind
  3. A body corporate
  4. A person convicted for an offence involving fraud or dishonesty, and any other stipulations under section 177 of the Companies Act, 2019 (Act 992).

Directors appoint company secretaries, who may be a natural person or a body corporate. Section 211 (3) of the Companies Act states that, directors shall not appoint a person as a company secretary unless that person,

  1. has obtained a professional qualification or a tertiary level qualification that enables that person to have the requisite knowledge and experience to perform the functions of a Company Secretary,
  2. has held office, before the appointment, as a Company Secretary trainee or has been articled under the supervision of a qualified Company Secretary for a period of at least three years,
  3. is a member in good standing of
    • the Institute of Chartered Secretaries and Administrators, or
    • the Institute of Chartered Accountants, Ghana,
  4. having been enrolled to practice, is in good standing as a barrister or solicitor in the Republic, or
  5. by virtue of an academic qualification, or as a member of a professional body, appears to the directors as capable of performing the functions of secretary of the company.

Per the new prescription by the Company’s Act, solicitors, or barristers in good standing in the Republic of Ghana are among persons qualified to be appointed as company secretaries.

Directors of companies may appoint the first auditors of the company and may fill a casual vacancy in the office of auditor as pointed out in Section 139 (4)(a) of the Companies Act. Company auditors as stated in Section 139 (11) shall hold office for a term of not more than six years and is eligible for appointment after a cooling-off period of not less than six years.

The processes involved are;

  1. Conducting a Company Name Search at the Registrar General’s Department

The first step is to choose a company name and conduct a name availability search at the Registrar General’s Department (RGD). A limited liability company must have a name that ends with either “Limited” or ‘Ltd”. Names submitted to the RGD must be unique in order to avoid being rejected by the RGD. Names rejected are deemed misleading, too similar to existing names or violates existing trademarks or business marks.

A company may reserve their company’s name at the Registrar per Section 22 of the Act . It states that;

  1. An application for reservation of the name of a company may be sent or delivered to the Registrar and shall be in a form approved by the Registrar.
  2. The Registrar may, after receipt of the application and on payment of the prescribed fee, reserve a name pending registration of a company or a change of name by a company.
  3. A reservation under subsection (2) shall not exceed two months and may be renewed for a further period of two months.
  4. A company shall not be registered under a reserved name or under any other name which in the opinion of the Registrar is similar to the reserved name.

Thus, the promoters of the company per the stated legislation have the right to preserve a name pending the future the incorporation of the company.

  1. Obtaining a Tax Identification Number (TIN) for its Members

The company must register with the Ghana Revenue Authority (GRA) for the issuance of TIN for all company directors, secretaries, and shareholders if they do not have them already. A TIN form is completed at the GRA office with a photocopy of the individual’s ECOWAS identity card attached.

  1. Completion of Documents from RGD

Section 13 (1) of the Companies Act states that, an application for incorporation shall be made in the prescribed form and delivered to the Registrar.

Subsection 2 of Section 13 states that, the application shall include,

  1. the name of the company as required by section 21;
  2. an indication of the type of proposed company;
  3. the nature of the proposed business in the case of a company registered with an object;
  4. the address of the proposed registered office and principal place of business of the company in the Republic, the telephone number and the post office box, private mail bag or digital address of the registered office of the company;
  5. the electronic mail address and website of the company, if available;

Now, companies are required to fill form 3 from the Registrar General’s Department with details of company directors, secretaries, auditors.

Details of the directors are stated in Section 13 (2) (g) as follows,

  1. the present full name and any former name;
  2. the particulars of any business occupation and other directorships held by the director as provided by section 215; and
  3. the residential, occupational, postal and electronic mail addresses and telephone contact;

The company secretary has to fill the form with the following proposed particulars under Section 13 (2) (j):

  1. the present full name and any former name;
  2. the usual postal, occupational and electronic mail address;
  3. the residential address in the case of an individual; and
  4. the business occupation as provided by section 215;

The auditor has to also provide the particulars under Section 13 (2) (k):

  1. the present full name and any former name;
  2. the postal and electronic mail addresses and telephone number
  3. the residential address in the case of an individual; and
  4. the consent of the auditor;

A beneficial ownership form is also filled. This is to disclose the beneficial owners of the company. Section 13 (m) (i – viii) outlines the particulars to be filled by a beneficial owner. They are;

  1. the full name and any former or other name;
  2. the date and place of birth;
  3. the telephone number;
  4. the nationality, national identity number, passport number or other appropriate identification and proof of identity;
  5. the residential, postal or email address, if any;
  6. place of work and position held;
  7. the nature of the interest including the details of the legal, financial, security, debenture or informal arrangement giving rise to the beneficial ownership; and
  8. confirmation as to whether the beneficial owner is a politically exposed person;

Every company must have a constitution. Section 23 of the Companies Act says that,

  1. A company has the option to have a registered constitution.
  2. Where a company opts to have a registered constitution, the document that represents the constitution shall be
  1. signed by one or more subscribers or the Company Secretary, and
  2. delivered to the Registrar by the subscriber or an authorised representative before incorporation; or
  3. delivered to the Registrar by the Company Secretary, director, or an authorized representative after incorporation.

Details of the constitution of the company which governs the operations of the company must filled on the forms provided. Details such as the number of shares the company is registered with, who the shareholders of the company are and the respective shareholding proportions between its members must be provided.

  1. Payment for Stamp duty, Business Incorporation and Filing fees.

Stamp duty and business incorporation and filing fee are the two main statutory fees to be paid at the Registrar General’s Department. Stamp duty is 1% of the company’s stated share capital. The registration fee must also be submitted to the Registrar of Companies.

  1. Collection of Company Registration Documents

Incorporation of a company takes place when the Registrar is satisfied with the necessary documents submitted and the upon payment of the necessary fees. Section 14 of the Companies Act states that,

  1. Where the Registrar is satisfied that the application for incorporation of a company complies with this Act, the Registrar shall, after payment of the prescribed fee, certify under the seal of the Registrar that the company is incorporated and in the case of a limited liability company, that the liability of the members is limited.
  2. From the date of incorporation, the company becomes a body corporate by the name contained in the application for incorporation and, subject to section 13, is capable of performing the functions of an incorporated company.

Under Section 15 of the Companies Act, it states that the certificate of incorporation, or a copy of that certificate, certified as correct by the Registrar, is conclusive evidence that the company has been duly incorporated under this Act and proceedings shall not be brought in a Court to cancel or annul the incorporation.

Conclusion

Registering a company at the Register General’s Department is quite easy provided the necessary steps involved in registering a company is followed to the letter.

Notes on the contributor.

Mr David Yaw Danquah is the founder and Managing Partner of Legalstone Solicitors, a boutique law firm in Ghana with a concentration on Corporate and Commercial, Mining and Infrastructure, Debt Recovery and Restructuring, Real Estate and Construction Law, and Commercial Arbitration.

He heads the firm’s practice areas focusing on Corporate and Commercial, Mining and Infrastructure, Debt Recovery and Restructuring, and Commercial Arbitration.

David has advised on numerous investment and mining-related transactions. He also has assisted countless international entities in establishing their operations in Ghana and, through his firms, offers support services to those entities. He has an impeccable record of providing technical savvy and exceptional client services.

David is a graduate of Kwame Nkrumah University of Science and Technology (KNUST), Kumasi, where he received his bachelor’s degree in law (LL. B) and the Ghana School of Law, where he studied and received a Post Graduate Qualifying Certificate in Law (PQCL). Furthermore, he holds a Certificate in Negotiation Mastery from Harvard University. In addition, David has an LL.M. with a Merit Degree in International Dispute Resolution from the prestigious Queen Mary University of London, United Kingdom.

David is a member of the Ghana Bar Association, Association of International Petroleum Negotiators (AIPN) and Institute of Energy Law (IEL) based in Houston, U.S.

Legal Notice

The contents of this publication, current at the date of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your circumstances should always be sought separately before acting based on this publication.

© Legalstone Solicitors

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