Doing Business In Ghana – Part 1

A Story of Passion and Determination – The Birth of Ahaspora
May 19, 2016
Ghana Sports Funding – Football or Bust!
June 17, 2016

Depending on your business needs, there are 6 main types of legal entities you may form in Ghana.

  1. Company Limited by Shares– This is a business entity registered at the Registrar General’s Department comprising at least two individuals acting as directors of the company and at least one person (company or individual) acting as a shareholder in the entity with objects which are (usually) for the generation of profit. The liability of the members of this entity are limited by the value of their shares.
  2. Company Limited by Guarantee– This company structure is best suited for Not-For-Profit Organisations. This is because the objects of a company limited by guarantee cannot include any for the generation of profit. As such these companies are exempt from corporate tax (although the organisation will have to pay income tax on behalf of any its salaried employees) The Company Limited by Shares and Company Limited by Guarantee are jointly referred to as “ Limited Liability Companies” this is because the personal assets of a persons who form such entities are protected from liability. In other words the liability of members of such a company is limited (by the value of their shares or guarantee).
  1. Company Unlimited by Shares– This is a business entity registered at the Registrar General’s Department comprising at least two individuals acting as directors of the company and at least one person (company or individual) acting as a shareholder in the entity with objects which are (usually) for the generation of profit. The liability of the members of this entity are not limited by the value of their shares. It is typically used for entities that give professional advice and services such as law firms for instance.
  1. Sole Proprietorship– This is an entity exclusively owned by an individual who is entitled to all the profits of the business and personally liable for all liabilities of the business . In Ghana such entities are not required to be incorporated at the Registrar General’s Department (RGD). If the owner of this entity would like to operate under a business name it is however required to register such business name at the RGD.
  1. External Company– An external company is a corporate body incorporated outside of Ghana which seeks to register a place of business in Ghana. Although an external company is subject to Ghanaian tax laws (income & corporate tax), such a company is regulated by the laws of the country in which it was originally incorporated in.
  1. Incorporated Partnership – Where two or more people (up to a maximum of 20) decide to go into business for the generation of profit together , they may decide to do so through an incorporated partnership registered at the RGD. There is no protection of a partners personal assets in an incorporated partnership. The acts of one partner binds the whole partnership.

Samuel-Baddoo-compressor

The writer, Samuel Badoo is a commercial lawyer and Co-founder at Swiftlaw. Swiftlaw is an online legal platform that allows clients to register a company or intellectual property in Ghana simply by filling out a form online.

Samuel’s next post will explore the steps involved in registering a limited liability company in Ghana. Stay tuned.

Leave a Reply

Your email address will not be published. Required fields are marked *