HOW TO START A BUSINESS IN GHANA (PART THREE)
In this post, we are going to conclude on the steps to start a business in Ghana. If you missed the first two articles in this series please read How to start a business in Ghana (PT 1) and How to start a business in Ghana (PT 2) to get a full grip of the process to starting a business in Ghana.
Step seven: Register your business
The Companies Code 1963 (Act 179) is the law that regulates the formation of companies in Ghana. Under this Act, investors are allowed to establish and register a place of business in Ghana.
The Government of Ghana recognizes that attracting direct foreign investment requires an enabling legal environment, and has passed laws that encourage foreign investments and replaced some that previously stifled it. One of such laws is the Ghana Investment Promotion Center (GIPC) Act, 1994 (Act 478).
Under this Act, investors are free to set up investment projects in all sectors of the Ghanaian economy, without prior approval by the GIPC, with the exception of the mining, petroleum, and free zones sectors, as well as portfolio investments.
Investments in the mining and petroleum sectors require approval or licensing by the Minerals Commission and the Ministry of Mines and Energy respectively. Free Zones (Export Processing Zones) investments must be approved by the Ghana Free Zones Board, while portfolio investments are handled by the Ghana Stock Exchange. Sector-specific laws further regulate banking, non-banking financial institutions, insurance, fishing, securities, and real estate. Foreign investors are required to satisfy the provisions of the investment act as well as the provisions of sector-specific laws.
In registering the company, one must go through the following necessary procedures:
1. Acquire a Tax Identification Number (TIN)
The applicant needs to acquire a TIN before proceeding to the company registration. The TIN form is acquired with the applicant’s ID card and it is obtained for free. The number would be obtained within two days on average.
The applicant can obtain the form from either the Registrar-Generals Department or the Ghana Revenue Authority.
2. Check for availability of company name and submit company documents to obtain the certificate of incorporation
The applicant may pick up a prescribed Form A from the in-house bank, and submit filled forms at the bank. The Registrar examines and issues business registration certificate as well as certified true copy of the form to be submitted as an attachment.
The forms would require the following information:
- Name of company
- Nature of the business that subscribers intend to engage in
- Full names of subscribers and shareholders, their addresses, percentage shareholdings, occupation, and any directorships in any other company
- Full names of the first directors of the company. A company must have a minimum of 2 directors and at least one director must be a resident of Ghana at all times, of sound mind, and of legal age (not younger than 21)
- Full name and address of company secretary and auditors (a letter of consent to act as auditor is attached)
- The number of shares that the company is to be registered with and the stated capital
- An attestation that the minimum nominal capital complies with the requirement that a company 100%
- Ghanaian-owned has minimum nominal capital of at least GHC 500.
For tax purposes, a form is filled at the Registrar-General’s Department. After filling the form, officials of the Ghana Revenue Authority assist in the generation of a tax identification number for both the company and all the employees of the company to be registered.
The tax identification number (certificate) is usually obtained by the Registrar General’s Department on behalf of the incorporated company. Four or five copies of the company regulations and Forms 3 and 4 are required (auditors, banks, solicitors, company secretaries may each require a copy).
A letter from an auditing firm must also be presented at the moment of document submission.
3. Commissioner of Oaths authenticates forms required for the certificate to commence business
The Commissioner for Oaths, located in the Registrar General Department, usually swears the oath within a day to enable the company to obtain the certificate to commence business. The Registrar of Companies automatically registers new companies with the IRS.
4. Deposit paid-in capital in an account
To deposit the paid-in-capital in a bank account, the applicant must present copies of the following documents: company regulations; the certificate of incorporation and the certificate to commence business; and signatures of the authorized company representatives.
5. Apply for business licenses at the Metropolitan Authority
The business license is also known as the Business Operating Permit (BOP). This is the permit that would give the go-ahead for the commencement of the business. Failure to obtain the permit before running the business would result in some issues with the metropolitan authorities. The cost to apply for a BOP at the Metropolitan Authorities depends on the type of business and the category in which it falls. Documents to be submitted depend on the type of enterprise (for example, restaurants must have permits from the fire department and the Town and Country Planning Authority and, among other documents, an inspection certificate from the Ghana Tourist Board).
6. Inspection of work premises by the Metropolitan Authority.
An officer will then visit the business premises and report to the Revenue Accountant of the Metropolitan Assembly, who in turn submits a report to the Revenue Mobilization Subcommittee of the Metropolitan Assembly. The sub-committee will then meet to deliberate on the report and then recommend to the Executive Committee of the Metropolitan Authority, whether any adjustment is required.
7. Apply for social security
It is important that all business owners register their employees and themselves with the Social Security and National Investment Trust (SSNIT) to make contributions towards their retirement. To apply, the company must attach the list of employees, their respective salaries and social security numbers, the company’s certificate of incorporation and certificate to commence business.
For more detailed information, visit the website of the Registrar Generals Department on http://www.rgd.gov.gh
Credit: doingbusiness.org, ghanaembassy.org