INCORPORATING A COMPANY LIMITED BY SHARES IN GHANA PART 2

Introduction

In our last article, we focused on the pre-incorporation stage of registering a company limited by shares and discussed the things that must be done before a company starts filling out the relevant paperwork to be submitted at the Registrar-General’s Department (RGD). These include conducting a name search, appointing Directors, a Company Secretary and an Auditor, and deciding whether to adopt a Standard Constitution provided by RGD or draft a unique Constitution. In this second part of our three-part article series, we will move on to discuss the incorporation stage of registering a company limited by shares. We will address the following:

• What forms must be filled and submitted?
• What are the steps involved in the submission process?
• What are the costs involved?

Required Forms

In the past, one had to purchase incorporation forms from the RGD office. However, all the forms are now conveniently accessible on RGD’s website. To make it even easier, RGD has created folders based on company type that contain all the relevant forms that must be completed for incorporating that company type. So, to incorporate a company limited by shares, one must simply go on the RGD website, find the “company limited by shares” section, and download the appropriate packet for the specific type of company one is trying to register (i.e. private limited by shares or public limited by shares). The following forms must be completed and submitted to the RGD to register a private company limited by shares:

• Form 3 - On this form, one needs to provide basic information about the company. This information includes the office address, digital address, postal address, contact email, and contact number of the company. The form also asks for the personal information of the Directors, Company Secretary and Auditor. This information includes the name, nationality, date and place of birth, occupation, TIN number, residential address, email address and contact number. Please note that the digital address of a location can be acquired using the GhanaPost-GPS app, which is available for download on the App Store and Play Store. 

A company must report their authorized shares and issued shares as well as their stated capital. Authorized shares refer to the total number of shares that the company is permitted by its Constitution to issue. Issued shares are the total number of shares which have actually been given out by the company. Stated capital refers to the total paid-up value in cash and kind of a company’s issued shares.

·       Consent Forms (Form 26A and 26B) - The Directors must each fill and sign consent form 26A and the Company Secretary must fill and sign consent form 26B. These forms confirm that they agree to take on the positions and duties for which they have been appointed. 

• Auditor Consent Letter - The appointed Auditor must write and sign a letter on letterhead consenting to act as an auditor for the company. 

• Statutory Declaration (Form 26C) - The Directors of the company must each fill and sign a statutory declaration form. This form affirms that the Directors have not been charged with or convicted of a criminal offense involving fraud or dishonesty in the 5 years prior to the date of filling the form; have not been charged with or convicted of a criminal offence relating to the promotion, incorporation or management of a company that has become insolvent in the 5 years prior to filling the form; and have not been a Director or senior management of a company that has been insolvent in the 5 years prior to filling the form. If a Director has been caught up in any of the aforementioned situations, they do not qualify to be a Director. The statutory declaration forms must be stamped by a Commissioner of Oaths before submission. You can find a Commissioner of Oaths on RGD’s premises 

• Beneficial Ownership Declaration Forms (BO1 and BO2/BO3/BO4) - The company must declare whether or not it has any Beneficial Owners (BO). The form used for this initial declaration is the BO1 form. A BO is a natural person, publicly listed company and/or a government owned company that has substantial and significant interest or control over a company; receives substantial economic benefits from a company whether acting alone or together with other persons; on whose behalf a transaction is conducted; or who exercises significant control or interest through a formal or informal agreement. The control or interest can be direct or indirect. 

Generally, a person who has direct or indirect interest of 20% or greater in a company must be registered as a BO. Companies in sectors that are considered high risk, like banking and financial institutions, real estate companies, gaming and betting companies and used car dealership companies, must report anyone with 5% or more control or interest. Companies in the extractive industry must report all BOs regardless of the percentage of their interest. If a foreign politically exposed person has an interest of 5% or greater in any company, regardless of the sector, they must be reported as a BO of that company. For a domestic politically exposed person, there is no percentage threshold and any shares or any form of control over a company in any sector must be registered. 

If a company has BOs, it has to fill other forms in addition to the BO1 declaration form. The additional form it fills depends on whether the BO is a natural person (BO2), a publicly listed company (BO3) or a government owned company (BO4). You can read more about the Beneficial Ownership requirements in our previous articleon this topic.

·      Constitution - If the company opts to have a unique “Registered Constitution” instead of RGD’s “Standard Constitution,” they must submit the constitution to the RGD to be reviewed to ensure that it contains certain regulations. If the company opts for RGD’s Standard Constitution, they simply have to check the “Standard Constitution” box on the first page of Form 3 and RGD will present them with a copy of the appropriate constitution at the end of the incorporation process.

Submission Process

Once the necessary forms have been prepared, you must go to the RGD to submit the application documents. At RGD, you will be required to get a ticket at the entrance and will be directed to the appropriate window to wait until the number on your ticket is called. We strongly advise that you go early to avoid a long wait. When your number is called, you will give your application documents to the Company Inspector who will vet your documents to confirm that everything is in order or instruct on changes that have to be made. If everything is in order, you will be required to pay the prescribed fees at the in-house bank. Thereafter, your application documents will be passed on to the data entry team for the information to be captured in the system.

Costs Involved 

As of March 2021, the official costs involved in the incorporation of a company limited by shares are as follows:

• Name Reservation - GHS 50
• Stamping of Statutory Declaration Forms by Commissioner of Oaths - GHS 5 per form. GHS 10 for required minimum of 2 directors
• Incorporation Fee - GHS 230 
• Filing Fee - GHS 50 
• Stamp Duty - 0.5% of stated capital

Conclusion

Once the application documents have been successfully submitted, it typically takes about two to three weeks for RGD to process the application. At the end of the process, RGD will present you with a Certificate of Incorporation and a copy of the Constitution by which the company must operate. This concludes the incorporation phase of registering a company limited by shares however, the company is still not a validly existing entity at this point. The company must register with the Social Security and National Insurance Trust (SSNIT), Ghana Revenue Authority (GRA), District Assembly, Ghana Investment Promotion Centre (GIPC) if necessary, Data Protection Agency, and industry specific licenses. These additional registrations will be the subject of the third and final part of this article series.