Incorporation of a Company In Ghana – What You Need To Know

Incorporating a company in Ghana is a crucial step for businesses seeking legal recognition and protection. This article explores what a company is, and its key characteristics, and outlines the incorporation process under Ghana’s Companies Act, 2019 (Act 992).

A company is generally defined as a legal entity created to conduct business or other activities. While many companies aim for profit, some, like Non-Governmental Organizations (NGOs), operate for non-profit purposes. In Ghana, companies can be incorporated or unincorporated, with incorporated companies recognized as separate legal entities under the Companies law (Act 992).

CHARACTERISTICS OF A COMPANY

1. Separate Legal Personality – A company is considered a separate legal entity, distinct from its members, and is treated as a person under the law. This means that while the company is liable for its debts and liabilities, its members are not personally responsible. However, as an artificial person, a company may not have access to all the claims available to natural persons, such as those for physical harm. Nonetheless, a company can be regarded as a person for purposes such as defamation.
2. Perpetual succession – The company will continue to exist despite the death, bankruptcy retirement or change in the membership of the company.
3. Directors – Directors are appointed to manage the affairs of the company. By law, a company incorporated in Ghana is required to have at least two directors.
4. Shareholders – Members of a company are shareholders with at least one share and whose names have been entered into the register of members.
5. Written Constitution – The written constitution governs the operation of the company and defines the key elements of the company structure.

THE PROCESS OF INCORPORATION

1. Eligibility:
   • Anyone who is 18 years or older can apply for the incorporation of a company in Ghana.
2. Application Submission:
   • To start the incorporation process, one must submit an application form to the Registrar.
3. Required Information:
   • The application must include the information required in section 13 of the Companies Act of Ghana. The required information includes:
     • The company’s name.
     • The type of company.
     • The nature of the business (if the company has a specific purpose).
     • The address of the registered office and main business location.
     • Details of:
       • Subscribers (the first shareholders).
       • Proposed directors.
       • The company secretary.
       • The proposed auditor.
     • See Section 13 of ACT 992 for the full list of required information.
4. Constitution:
   • A company does not have to register a constitution when it is being incorporated. .
   • However, if a company chooses to register a constitution at incorporation, it must:
     • Submit the completed application form and the proposed constitution.
     • Have the constitution signed by one or more subscribers of the company or the company secretary.
     • Deliver these documents to the Registrar of Companies.
5. Company Without a Constitution:
   • If a company does not register a constitution at incorporation, its rules of operation, including the duties and rights of directors and members will be governed by the Companies Act.
   • A company can still adopt a constitution after it is incorporated.
6. Shares and Subscribers:
   • For companies with shares, each subscriber must:
     • Indicate the number of shares they are buying and the amount paid or to be paid.
7. Identity Verification:
   • The applicant must provide proof of identity and residence when submitting the application for incorporation
8. Registrar’s Approval:
   • The Registrar will review the application.
   • If everything is correct and fees are paid, the Registrar will issue a Certificate of Incorporation.
9. Company Status:
   • Once incorporated, the company will have the name given in the application and will be able to perform company functions.
   • The date on the Certificate of Incorporation is the company’s official start date.
   • This certificate serves as proof that the company is officially incorporated.
10. Legal Compliance:
    • It is important to ensure that the company’s purpose and constitution comply with the law.
    • Failure to meet these requirements may result in the Registrar refusing to register the company.

IMPORTANCE OF INCORPORATION

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The benefits of incorporating a company include:

1.  Protecting its members from being personally held liable for the company’s obligations.
2. Possessing the full capacity to engage in any business or activity, perform any act or enter into any transaction.
3. The ability to sue in its name.
4. Instilling confidence in customers, as they are more likely to prefer doing business with incorporated entities that are incorporated over those that are not.

Incorporating a company offers numerous benefits, and although the process may seem complex, it is important to ensure that your company is registered. This step will establish your business as a fully recognized entity both nationally and internationally, allowing you to enjoy the associated benefits.

David Amaara Adaawin on behalf of OSD & Partners