Starting a business in Ghana
The first step in starting a business in Ghana is to legally register the business entity at the Registrar General’s Department (RGD). There are various forms of business entities that can be registered under the laws of Ghana and it is therefore imperative to choose the right legal structure that best serves your business intentions. These are the various forms of business registration under the laws of Ghana;
- Companies Limited by shares
- Companies Limited by guarantee
- Companies with unlimited liability
- External Company
- Sole Proprietorship
Registered Companies in GhanaWith the automation at the Registrar General’s Department (RGD), business registration has become fairly easy.
All business registration forms are downloadable at http://rgd.gov.gh/index.php/forms/ or on-sale at GHS 10.00 at the RGD. Register your company in Ghana with ease, by simply following the steps outlined below.
Steps to Registering a Company Limited by shares in Ghana
STEP 1 – Company Name search at RGD
Conduct your company name search in Ghana to ensure the availability of the proposed business name for the company. Company promoters may after the name search apply to have their business name reserved for a period of 30 days.
The business name must be meaningful, relevant and distinctive. Business names that are too similar to existing names are likely to be rejected by the Registrar General’s Department. For example, If there is an existing company called Yayra Company Limited, a similar name like Yayara Company limited cannot be registered; such a name would be rejected, however, applicants will be advised to amend their company name accordingly. The choice of a business name must be relevant to the nature of activity of the company. Moreover, The business name must not be offensive and undesirable or violate existing trademarks.
STEP 2 – Taxpayer Identification Number (TIN) registration for all company directors, secretary and shareholders
Download TIN forms @ http://rgd.gov.gh/wp-content/uploads/2015/12/Taxpayer-registration-form-individual.pdf . All company directors, secretary and shareholders are required to register and obtain a TIN for the purposes of business registration. Complete TIN forms and attach a copy of photo ID (Drivers, passport bio-data, voters ID). TIN numbers are created within 24 to 48 hours at no charge at any Ghana Revenue Authority office.
TIN numbers can also be created for corporate organisations. This situation becomes necessary when the shares of the company being registered are held by a corporate entity. In such a scenario, the corporate organisation will obtain a TIN Form for Organisations and dully complete same and attach a letter of introduction. A TIN number will subsequently be created for the corporate shareholder.
All persons or organisations are required to have one TIN number for all their registered businesses; in case you decide to register more than one business entity or you serve as a director on several business organisations.
Information required to complete an individual TIN form include;
- Photo ID details
- Mother’s maiden name
- Residential and postal address
i. TIN form for business registration
For more information, watch this video;
STEP 3 – Complete form 3, form 4 and company regulations
The next step is to download and complete the following forms
ii. Returns of Particulars of the company limited by shares registration form – Form 3
iii. Form 4 for company registration
iv. Regulations of a Private company limited by shares
Information required to complete the incorporation forms include
- Company name
- Registered address
- Postal address
- Principal place of business
- Business objects or activities
- auditors details
- Authorised and issued shares
- Stated capital
- Shareholding structure
- Personal details of directors, secretary and shareholders (nationality, date of birth, occupation, residential address)
According to the Companies Act 179, all c0mpanies are required to have at least two initial directors and a secretary during the company registration process. At least one of the company directors or secretary must be resident in Ghana.
After forms are duly completed, the directors, secretary and shareholders have to append their signatures on relevant pages before submission.
Registrar General Digital Address System
All businesses that want to register at Registrar General Department must have digital address in relations to their business units. This will enhance compliance by RGD, debt recovery by banks, business permit by AMA, paying of taxes by GRA and payment of SSNIT contribution.
STEP 4 -Pay stamp duty, business incorporation and filing fees
There are two main statutory fees to be paid at the Registrar General’s Department during company registration; these are Stamp duty, Incorporation and filing fees.
- Stamp duty is 0.5% of the stated capital. For example a stated capital of 100,000 Cedis is equivalent to a stamp duty of 0.5% x 100,000 Cedis = 500 Ghana Cedis. The minimum amount of stated capital for all 100% Ghanaian owned limited liability companies is 500 Cedis.
However, companies with joint foreign ownership, 100% foreign ownership have different stated capital requirements. The stated capital requirement for companies in this categories are;
- 100% foreign ownership –US $ 500,000
- Joint venture between foreigner and Ghanaian – US $ 200,000
- Trading enterprise (whether jointly owned or 100% foreign owned) – US $ 1,000,000
- Incorporation and filing fees are also required to be paid upon submission of business registration forms. The total cost is 330 Ghana Cedis, which is payable directly at the RGD by cash.
STEP 5 – Collect Business registration certificates
Upon submission of forms, one should expect to have the process completed in 2 weeks, after which the following documents will be issued;
- Certificate of incorporation
- Certificate of commencement ` `
- Form 3 & 4
- Company regulations
These are the legal documents of proof of company’s existence in Ghana. The documents will indicate clearly the business name, activities, business address, directors’ details, company TIN as well as shareholders information among others. The business certificates can be used for any business transaction or open a corporate bank account with any of the commercial banks in Ghana.
Annual General Meetings
Pursuant to section 149 of the companies Act – ‘Except as provided in subsection (3) of this section, every company shall in each year hold a general meeting as its annual general meeting in addition to any other meetings in that year, and shall specify the meetings as the annual general meeting in the notices calling it; and not more than fifteen months shall elapse between the date of one annual general meeting and the next;
Provided that, so long as a company holds its first annual general meeting within eighteen months of its incorporation, it need not to hold it in the year of its incorporation or in the following year.
The cost of annual returns is ¢50 for all companies limited by shares, companies limited by guarantee, partnership and companies with unlimited liability. Failure to do so shall attract a penalty of ¢350.
On other hand, the annual returns fee for Sole proprietors and External companies are ¢25 and $600 respectively. An external company that does not file its annual returns shall be made to pay a penalty of $750.
To file for annual returns, these are the requirements;
- A complete annual returns form from Registrar General’s Department
- Audited Financial Statement for the year. The Financial Statement must be approved and signed by Directors of the company at the Annual General Meeting of the company.
- Fee of ¢50
Filing Annual Returns for the Company
As required by section 122 of the companies Act, 1963, all registered companies are to file annual returns each year, after 18 months of incorporation.
Section 122. (1) states- Every company shall once at least in every year, deliver to the Registrar for registration of an annual return shall including particulars of every member of the company, and in the form and relating to the matters prescribed in the third schedule to this code;
(2) The annual return shall be completed and within forty-two days of the date on which the statements, accounts, and reports of the company are sent to the members and debenture holders pursuant to section 124 of this code, and shall be signed by a director and the secretary of the company.
For more information, watch the video;
Making Changes or Amendments after registration of the Company
After registration of a company, the shareholders may choose to make amendments like change of business address, directors, share transfer, change of business name, activity, increase in stated capital etc. All these amendments must be done at the Registrar General Department.
These are forms to be completed depending on the nature of change and written resolutions prepared by the company secretary, dully signed by both shareholders and directors. For Change of directors, both resignation and acceptance letter from the old director and new director respectively, must be attached.
Registration with Registrar General’s Department is fairly easy. However, forms for registration are mostly queried by the Registrar on grounds of incomplete information or misinformation provided on the forms. This normally culminates in the delay of the completion of registration.
We hope this article will help enlighten you on the processes involved and staying compliant. Tell us what your experiences have been in registering your business in Ghana and feel free to comment, share and ask questions