The Registrar-General, Jemima Oware, has announced new changes to the processes and procedures of registering companies in Ghana to promote Government’s efforts at improving the ease of doing business in Ghana.
She stated that the E- Registrar software application has finally been upgraded in accordance with the new Companies Act, 2019, (Act 992).
Commencing from the 28th of September 2020, members of the business community who wish to register new companies would have to visit the Department’s website www.rgd.gov.gh and download the new prescribed Forms and complete them appropriately for the six types of Company registration.
“There would be no need to fill a Form 4 and the Regulations for the incorporation of a company. The new Prescribed Forms uploaded on the website encompasses every detail that would have been filled in the previous Forms for the six types of Company Registrations” the Registrar-General hinted.
According to her, another change that has been introduced with the implementation of the Act 992, is that persons who are registering any of the six (6) types of Companies (Private Companies Limited by shares, Private Companies unlimited by shares, a Public Company Limited by shares, a Public Company unlimited by shares, a Private Company limited by Guarantee and a Public Company Limited by Guarantee) would have had to fill Regulations for all these types of companies.
“Now we have made it easier, we have Constitutions to replace Regulations for all Companies. One can just adopt Schedules 2, 3 or 4 of Act 992 which represents the Constitution for a Private Company Limited by Shares, a Public Company Limited by Shares and a Private Company Limited by Guarantee respectively. All of these Schedules are available on the website as your Constitutions to be adopted together with the different Prescribed Forms for the different types of Companies”, Jemima Oware stated.
The Department has also designed Constitutions for Private Companies Unlimited by Shares, Public Companies Unlimited by Shares and a Public Company Unlimited by Guarantee that can be adopted at the point of registration together with the Prescribed Forms for the different types of Companies.
All such Promoters who choose to adopt the prescribed Constitutions would not be mandated to provide objects but would be required to disclose which sectors the Company would be operating in through the ISIC codes provided on our electronic eRegistrar software.
Promoters of Companies could also download the Prescribed Forms for the different types of Companies and attach their own Registered Constitution which should necessarily have objects.
She advised that all other companies that are not regulated by the RGD, but by a different Regulators would have to register their Companies with their own Registered Constitutions and disclose the specific objects in these Registered Constitutions.
Examples of Companies regulated by other institutions are for example Banks, Microfinance and Microcredit Companies regulated by Bank of Ghana, Companies with Foreign participation regulated by GIPC, Companies in Academia regulated by the Accreditation Board, Security Firms regulated by the Ministry of Interior, Companies in the Securities Industry and Capital Markets regulated by the Securities And Exchange Commission and the Ghana Stock Exchange,
Others include the Extractive Industry regulated by the Minerals Commission, Petroleum Commission, Companies operating in the Free Zones Enclave, Companies engaged in betting regulated by the Gaming Commission, Legal Firms, Architectural Firms and such like.
She further emphasized that the Act also does away with the Certificate to Commence Business or the need to swear before a Commissioner of Oath since the Act does away with the Form 4 entirely.
Strengthening Corporate Governance under ACT 992
The Registrar-General indicated that one key benefit of the new business law is its inherent strict requirements that would improve corporate governance going forward in the implementation of the Act.
“The time where Companies only existed on paper is over” Jemima Oware warned.
According to Jemima Oware, under Act 992, a person shall not be appointed as a Director of a company unless the person has before the appointment submitted to the Company a Statutory Declaration to the effect that the Director has not within the preceding five years before the application been charged or convicted of a criminal offence involving fraud or dishonesty, or
Been charged with or convicted of a criminal offence relating to the promotion, incorporation or management of a Company; or has been a director or senior manager of a company that has become insolvent.
The Act further states that if even the director has done any of the above, he/she must state the date of the insolvency and the particular company.
For the first time, the Director must also consent to be a director and must file the consent within 28 days with the Registrar at incorporation to show that they have expressly given permission for their data to be put into the system as directors of the said company.
Again, Act 992 also specifies who qualifies to be a Secretary of a company which was not the case previously.
The Company Secretary for any Company under Act 992 must have obtained a professional qualification or a Tertiary level qualification that enables this Company Secretary to have the requisite knowledge and experience to perform the functions of a Company Secretary;
or must have held office before the appointment as a Company Secretary trainee or been articled under the supervision of a qualified Company Secretary for a period of at least three years;
or is a member in good standing of the Institute of Chartered Secretaries and Administrators; or the Institute of Chartered Accountants;
or a barrister or Solicitor in good standing ,
or by virtue of an academic qualification, or as a member of a professional body, appears to the directors as capable of performing the functions as the secretary of the company.
“It is also no longer going to be business as usual where people pick already prepared Auditors Letters of Consent placed at vantage points in the Department.
Under Act 992, a company must have an Auditor who is qualified and licensed in accordance with the Chartered Accountants Act, 1963(Act 170); and not disqualified for being an officer of the company or of an associated company.
A novel provision in this Act 992 is that an Auditor shall now hold office for a term of not more than six years and be eligible for re-appointment after a cooling period of not less than six years, the Registrar-General noted.
These Officers of the Company must swear on their own oath that they are indeed qualified to be Directors, Secretaries or Auditors of the Company.
All officers must also be 18 years and above, another novelty in Act 992 since the age of legal maturity is no more 21 years, but 18 years.
Jemima Oware further explained that the current system would accept a mandatory digital address downloaded from the Ghana Post App for the stated Principal place of business and Registered Place of Business as well as a valid email address otherwise the address would be rejected and the application will not be processed.
ACT 992 and Beneficial Ownership (BO) disclosure
The Register-General Jemima Oware, further stated that under Act 992, the RGD is deploying a new Central Beneficial Ownership Register for all companies operating in the country.
“We will start with requesting for BO Data from the Extractive Industry and other high risk sectors like Banks and other Financial Institutions, she noted.
According to her, a lack of information about who owns and controls businesses incorporated in Ghana is creating a “dangerous and widening gap” in the country’s fight against corruption, money laundering terrorism financing and other forms of financial crimes.
Beneficial ownership is a term in domestic and international commercial law that refers to the natural persons who exercise significant influence over and receive profits from a company who are not its legal owners.
“Some people can assign a “nominee” in relation to their shareholding or directorship position at the board and they would be at the back end controlling affairs, they would have a legal arrangement with such persons that we would not be privy to…but things have changed now, she disclosed.
Jemima Oware explained that from the 28th of September 2020, whoever wishes to register a company to operate in the Extractives industry should visit www.rgd.gov.gh to download the Beneficial Ownership Form and provide the data on who the beneficial owners of the company are.
Change of company names and suffixes
The Registrar-General announced that every company in Ghana would now have suffixes ending the names of their Companies that would immediately indicate which kind of entity the company name fell under.
For example, the suffixes ending the different types of companies would be as follows:
Private Company Limited by Shares would end with Limited Company or LTD
Private Unlimited Liability Company would now end with PRUC.
Public Limited Company would now end with PLC.
Public Unlimited Liability Company would now end with PUC;
Companies Limited By Guarantee would have the suffix LBG; and
Public Company Limited By Guarantee would now end with PLBG
“New companies that we would register from October would now have these new suffixes.
The Department would through a Press Release provide a period within which all existing companies would have to comply by passing special resolutions at their various Boards to change their names by attaching these different suffixes to their company names depending on which type of Company the name fell under,” she added.
The Registrar-General, Jemima Oware, appealed to the general public and the members of the business community to co-operate with the Department as it goes through the process of upgrading the system to ensure a smooth transition.
Press Releases would be released at intervals and in time for all clients and customers to be abreast with all the changes of the Companies Act, 2019, Act 992 as and when they would be deployed by the developers of the eRegistrar software.
Source: BusinessZone Online