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HOW TO START A BUSINESS IN GHANA (PART Two)
In this post, we are going to conclude on the steps of starting a business in Ghana. If you missed the first article in this series please read How to start a business in Ghana (PT 1) to get a full grip of the process to start a business in Ghana.
Step eight: Register your business
The Companies Code 1963 (Act 179) is the law that regulates the formation of companies in Ghana. Under this Act, investors have rights 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. Thus, the passing of laws to encourage foreign investments and replace old ones. 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, except for the mining, petroleum, and free zones sectors, as well as portfolio investments.
Investments in the mining and petroleum sectors need approval by the Minerals Commission and the Ministry of Mines and Energy. The Ghana Free Zones Board approve the Free Zones (Export Processing Zones) investments. The Ghana Stock Exchange handles the portfolio investments.
Sector-specific laws further regulate banking, non-banking financial institutions, insurance, fishing, securities, and real estate. Foreign investors must meet the provisions of the investment act. And also the provisions of sector-specific laws.
In registering the company, one must go through the following necessary procedures:
- Get a Tax Identification Number (TIN)
The applicant needs to get a TIN before proceeding to the company registration. You can get the TIN form with your ID card for free with two days on average.
The applicant can get the form from either the Registrar-Generals Department or the Ghana Revenue Authority.
- Check for availability of company name and submit company documents to get 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 a business registration certificate. The applicant should also submit a certified true copy of the form as an attachment.
The forms would include 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 at least 2 directors and at least one director must be a resident of Ghana at all times. He should be of sound mind, and of legal age (not younger than 21)
- Full name and address of company secretary and auditors
- The number of shares that the company registers with and the stated capital
- An attestation that the least nominal capital complies with the requirement that a company 100%
- Ghanaian-owned has a nominal capital of at least GHC 500.
For tax purposes, the applicant fills a form 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. This is both for the company and all the employees of the company.
The tax identification number (certificate) is usually obtained by the Registrar General’s Department. This is 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 need a copy).
The applicant should also present a letter from an auditing firm.
- Commissioner of Oaths authenticates forms required for the certificate to begin business
The Commissioner for Oaths, located in the Registrar General Department, usually swears the oath within a day. This is to enable the company to get the certificate to begin business. The Registrar of Companies then registers new companies with the IRS.
- 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
- the certificate to start the business
- signatures of the authorized company representative
- 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 get 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. The applicant should submit documents depending 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.
- 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.
They will then meet to discuss with the Executive Committee of the Metropolitan Authority.
- Apply for social security
All business owners should register their employees and themselves with the Social Security and National Investment Trust (SSNIT). This is to make contributions towards their retirement. To apply, the company must attach the list of employees, their respective salaries and social security numbers. Also, the company’s certificate of incorporation and certificate to start a business.
For more detailed information, visit the website of the Registrar Generals Department on http://www.rgd.gov.gh
Credit: doingbusiness.org, ghanaembassy.org
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