You are aware that starting a business might be financially
risky. Starting a business can be expensive, but it doesn't have to be that way
if you do some planning and study. The amount you may invest in your firm, though,
can be significantly impacted by unforeseen expenses that may have escaped your
attention in the past.
Businesses typically maintain their financial records on a
cash basis. This means that a business's accounting records must explicitly
show how much money was received, what was purchased, and what profits were
generated.
You must register with the government in order to keep track
of your company's financial records. A legitimate bank account and an official
letter of incorporation issued in the name of your business are typically
necessary for this.
A business entity is the one requirement you must meet
before starting a business in Ghana. The next step is to formalize the company
by registering it with the Registrar General's Department (RGD). There are
various business entities that may be formed in Ghana, and it is crucial that
you make the proper decision by selecting the legal structure that is most
appropriate for your company's industry.
The following is a list of various business registration types
permitted by Ghanaian law:
- Sole Proprietorship
- Foreign/External Company
- Companies with guarantee restrictions
- Unlimited liability companies
- Companies with share restrictions
Every business must submit its yearly returns as a going
concern, and as the company develops and changes, it may also occasionally
submit other statutory forms and resolutions. The Registrar General's
Department of Ghana (RGD) offers a wide range of services, including will
administration, business registration, marriage certification, and the
registration of trademarks and patents. What Is The
Cost of Business Registration in Ghana?
The price of the complete registration and incorporation
process varies from $600 to $800 depending on the size of your business.
Furthermore, a business bank account must be opened for at least $1,000. If you
open an account in your company's name and deposit the full $100,000, you'll
also have to pay an extra $1,000 for the account and director expenses. In
other words, a business bank account must be opened with at least $1,100.
Before you've even earned a dollar in profit, all this! The
good news is that registering is a rather simple process, and you may get ready
for it in advance with a measure of planning.
STEP 1: Business Name Search at the RGD.
You must first verify with the Registrar General's
Department (RGD) to discover if the name of your company has already been
registered by another party before you register your business. After the
search, you can request to have your name kept for 30 days. However, be sure
that the name of your company or business is memorable and conveys a lot about
it. The registrar is likely to reject
your business name if it appears to be the same as the name of another
registered business. As an illustration, if a business currently goes by the
name Tera Company Limited, a name similar to Tera Company Limited cannot be
registered.
The Ghana Registrar General Department would categorically
refuse such a name because it is already in use. However, applicants will be
instructed to change the name of their business. The selection or choice of a
business name must be connected to business operations. As a result, the
company name must not be offensive, vulgar, or infringe upon already registered
trademarks.
Step 2: Get Taxpayer Identification Number (TIN).
To register your firm, the directors, secretary, and
shareholders must do so and obtain a Taxpayer Identification Number. To
complete the TIN forms, they must affix a copy of a photo ID, such as their driver's
license, passport, or voter card. Taxpayer Identification Numbers are free and
can be obtained at the Ghana Revenue Authority's office in as little as 24 to
48 hours.
It is crucial that you obtain TIN numbers if a corporate
entity owns shares of your registered firm. In situations like this, your
corporate organization will receive a TIN Form that will be properly filled out
and have an accompanying letter of introduction.
If you choose to register more than one company entity or
you serve as a director of numerous business organizations in Ghana, you must
have a single TIN number for all of your registered enterprises.
Your Name and Your Occupation are among the details required
for each TIN form. Other details include:
- Your photo ID
- The maiden name of your mother
- The address you use for mail or home
- Your contact information
Step 3: Complete Forms 3 and 4 of the Company Regulations.
The applicable Application Forms, which serve as the
Company's Regulations, must be completed by all Limited Liability corporations.
A non-officer, non-employee, non-partner auditor who is a member of the
Institute of Chartered Accountants is a requirement for every corporation. A
Certificate of Incorporation and a Certificate to Commence Business are granted
if all such forms have been completed correctly and the necessary fees have
been paid.
The names and contact information of your directors,
secretary, and shareholders should be included. These specifics ought to
include their country, birthdate, line of work, and home address.
All corporations must have at least two directors and a
secretary in order to register their firm, according to the Corporations Act
179. Additionally, at least one director
of the corporation needs to be a citizen of Ghana.
The directors, secretary, and shareholders must first
complete the forms and then add their signatures to the appropriate pages
before submitting them.
A minor registration fee and a signed declaration that you
are establishing a legitimate business in Ghana are required for this initial
stage. Along with this, you must also submit a list of all the company's
owners, along with copies of their national identification cards.
Step 4: Paying stamp duty, incorporation, and filing costs.
Stamp duty, incorporation, and filing fees are the main
statutory fees that must be paid to the Registrar General's Department for the
registration of your company.
Stamp duties
0.5 percent of the declared capital is used to compute the
stamp duty. Consider a 150,000 Ghana Cedi capital, which translates to 750
Ghana Cedis at a 0.5% stamp duty multiplied by the capital's value. All limited
liability corporations with 100 percent Ghanaian ownership must have 750 Cedis
in reported capital as a minimum.
But combined foreign ownership companies with 100 percent
foreign ownership have differing stated capital needs. The stated capitals for
businesses in this category are:
- Completely foreign ownership: US$500,000
- A joint venture between a foreigner and a Ghanaian:
US$200,000
- Trading business (whether owned jointly or 100%: US$
1,000,000
Filing and Incorporation Fees
The incorporation and filing fees are another fee that must
be paid at the time business registration forms are submitted. At the RGD, cash
payments in the amount of 330 Ghana Cedis are accepted.
STEP 5: Collection of Business Registration Certificates.
The process will take about 2 weeks to complete after you
submit your forms. Following the
process, the following documents will be produced:
- Commencement certificate
- Certificate of incorporation
- Forms 3 and 4
- Your Company's policies
The documentation you will submit will comprise, among other
things, the company name, your business's operations, its address, the names of
its directors, its tax identification number, and the names of its
shareholders. This is done to prove a business's presence in Ghana. You can
register a corporate account with Ghanaian banks or utilize your business
certificates for any commercial transaction.
Step 6: Create an Account with the Center (GIPC)
All Ghanaian businesses must be registered with the GIPC.
Investor Registration Forms (Form GIPC/R1) must be completed in triplicate by
investors as part of the application process. The GIPC will formally register
the investment within five (5) days of the date of orderly receipt of these
forms (and their attachments). The appropriate GIPC fees and charges are listed
below (effective as of September 1, 2014).
Step 7: Create a Bank Account.
You can open a business bank account with the Ghana Commercial
Bank once your company has been registered. The GBA has given sole approval to
this bank to manage business-related financial transactions.
To open an account, you must provide a signed declaration
that you are starting a genuine business in Ghana, along with a passport-sized
photo and copies of your company's incorporation documents.
Annual General Meetings
In accordance with Section 149 of the Companies Act, it is
required of every company to hold an annual general meeting apart from any
other meetings that such a company might hold each year and which must be
clearly stated as the annual general meeting in the notices calling them. The
interval between the dates of each annual general meeting shall not be greater
than fifteen months unless otherwise provided in subsection (3) of this
section.
Your company's first annual general meeting can happen up to
18 months after incorporation without having to be held in the year of
incorporation or the year after.
All businesses that are limited by shares, limited by
guarantee, partnerships, and/or have unlimited liability, pay a fee of £50 for
yearly returns. A 350 penalty will be assessed for failure to do so.
Conversely, sole proprietors and external businesses are
charged a $25 and a $600 yearly returns cost, respectively. An external company
that fails to submit its yearly returns will be subject to a $750 fine.
Conditions for Submitting Annual Returns
- A yearly fully audited financial statement of the company
- At the company's annual general meeting, the financial
statement must have the Directors' approval and be signed.
- Fee of ¢50
- Submitting annual returns for the business
- According to section 122 of the Firms Act of 1963, all
registered firms must submit annual returns every year after 18 months of
incorporation.
- Modifications made after the Company's registration
After the company is registered, the shareholders may decide
to make changes such as changing the company name, the address for the
business, the directors, share transfers, activities, increases in stated
capital, etc. The Registrar General Department is the only place to make
changes.
Conclusion
To summarize, registering your firm doesn't have to
overwhelm you. It's fairly easy to register with the Registrar General's
Department. The Registrar does, however, frequently question registration forms
because they contain inaccurate or insufficient information.
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