Have you ever conceived a business idea so great that it was just a matter of bringing that idea to a reality? Ghana is a very busy country with several businesses taking place. These businesses are plied both physically and on online platforms. Businesses vary in types and forms and thus, they entail different aspects and processes. Do you know the types of businesses in Ghana and how to start one?
To a layman, a business is anything that accrues interest. Technically, a business entails more than just making a profit. In Ghana, most businesses are not registered and that is mostly due to ignorance. A basic requirement of starting a business is to register the business under a competent firm duty-bounded for that purpose.
READ ALSO: How To Register A Business In Ghana
There are various ways by which companies or businesses are formed. Some are formed individually and others are formed by a group or by organizations. There are a handful of types of companies in Ghana. Below are the various types of businesses.
Sole Proprietorship in Ghana is one of the common types of business. It involves only one person or entrepreneur who runs the affairs of the business. In this type of business, the liability of the sole proprietor is unlimited and he or she takes full responsibility for the business.
A partnership is a form of business that is formed and manned by a group. The minimum number of people that can undertake this type of business is two and usually up to a maximum of 20 persons. The people who make up this joint business are termed “partners”. Any transaction made is done per the terms and conditions of the legally binding document of the partners.
Limited liability companies can be started by a single shareholder and the shareholder must appoint two directors. It is required that at least one of the directors must be Ghanaian by nationality. The companies must appoint a secretary and a Ghanaian auditor to annually audit the financial reports. A Ghanaian Limited Liability Company must have an office and a post office box to disseminate information.
Although there are seven general types of businesses, in Ghana, only six of them are well recognised by the Registrar General’s department.
The forms of businesses include Company Limited by Shares, Company Limited by Guarantee, Company Unlimited by Shares, Limited Liability, Sole Proprietorship, Incorporated Partnership, Corporation, and External Company.
In General terms, there are four most common types of businesses in the world. They include the partnership, sole proprietorship, corporation, and Limited Liability Company. These common types of businesses are referred to as business structures.
A partnership is one of the seven types of businesses that are known worldwide. A group of people called partners come together to form a business firm. There are three types of partnership in Ghana; that includes non-trading partnership, limited partnership and commercial or general partnership.
Business and company can be used interchangeably although there exist some disparities between them.
The Registrar General Department is the office that registers newly created businesses and businesses that exist but has not been legally registered. Moreover, a firm like Bizaccess is a recognized business registration and regulatory organization in the country. Business owners or entrepreneurs will initially be tasked to come out with a unique name to register the business. This task might look very easy but is very complicated. The business owner must search and be sure that his or her proposed company name is not used by any other company. Moreover, it will ensure that no one else uses that company name for commercial purposes in the country. Names that are violating the law and are derogatory are not approved for business registration purposes.
Different forms correspond to the types of businesses.
The following are the general information that will be required during the filling of the registration forms:
Depending on the types of businesses that you want to register, some other documents will be required. After completing, if the information provided is deemed fit and supporting documents are accurate, a certificate of incorporation will be issued to the entrepreneur.
Although there are different types of businesses in Ghana, the duration of filling the business registration to receiving your certificate may take a few weeks to months depending on varying factors.
The cost of fully registering your business in Ghana ranges depending on factors such as the nationalities of the directors and the form of business. It costs ¢50.00 to register a business name and the cost is different from one business to the other. Check out the costs of registering the different forms of businesses in Ghana in the table below.
|Sole Proprietorship||¢60.00 + ¢50.00|
|Partnership||¢160.00 + ¢50.00|
|Company Limited by Shares||¢230.00 + ¢50.00+ ¢50.00|
|Company Limited by Guarantee||¢270.00 + ¢50.00 + ¢50.00|
|Unlimited Liability Company||¢230.00 + ¢100.00|
|External Company||$1200.00 + $600.00|
For the sole proprietorship companies in Ghana, the ¢50.00 is for the business name registration. In the ¢60.00, ¢10.00 is for the Certificate True Copy, ¢25.00 is for the filing of Form D, and the other 25.00 is the annual renewal fee.
The ¢160.00 fee in the partnership business consists of ¢150.00 for the business registration and ¢10.00 for the Certificate True Copy. An annual renewal of ¢50.00 has been added to the fees.
External Company businesses pay $1200.00 or its equivalence in cedis as registration fee in addition to a $600.00 paid as annual renewal fee.
The table above is a summary of the cost of business registration and can serve as a guide to the types of company registration that you should undertake.
The online business registration at the Registrar General's Department is not yet fully functional. The online process is currently used to start the registration process as there are still issues with the partnerships between institutions. However, there are Independent partners of the RGD that facilitate online business registration in Ghana. Biz Access is one of such companies and can have your business registered legally within 4 weeks. It is a private limited company in Ghana.
Do you know that a number of the well-recognized businesses and companies in Ghana are owned and managed by foreigners? Unilever Ghana, Airtel Ghana, Vodafone, Tullow Oil, KPMG, Guinness, and Coca-Cola are all foreign-owned companies in Ghana.
In this regard, every person, not limited to only Ghanaians, can start a business in Ghana. As the statement goes, in every game there are rules, beginning a business as a foreigner in Ghana has some rules and limitations that must be duly followed. Ghana is economically stable and peaceful hence foreign investors find it attractive to invest in Ghana.
According to the laws of the state, some petty trading and retail business are reserved only for Ghanaians. It is very necessary to know the businesses that have been reserved for only Ghanaians in this country. Some of these include:
All other businesses can be ventured by foreigners but need approval from a state agency. Additionally, foreigners need to apply for a business certificate at the metropolitan assembly.
As a foreigner, you will make a payment of ¢50.00 for business name registration and ¢5.00 for a certificate of regulations. Additionally, a cost of ¢15.00 is taken for the complete set of forms in addition to the company registration fee which costs ¢230.00.
Some foreigners fail to obtain some important documents like work permits and social security certificates. Moreover, some foreigners do not use the right means to obtain the required documents and in the long run, they end up losing their businesses.
Some people have several questions pertaining to business in Ghana that needs to be answered. Some ask about starting a business in Ghana with GHC 5000, others question on how to start a business with GHC 500, while others debate on issues like, what business can I start with 2,000 Ghana cedis.
Well, depending on the business you want to venture into, ranges of starting capital are available. An amount of ¢500 might be enough for a small-scale business of selling in school or the market. Also, engaging in the production of goods and services from a factory will require a very high starting capital.
With an amount of ¢5000, you can venture into a number of profitable businesses. You can start a mobile money telecommunication business with such capital and such business does not require any special skills. Other businesses that can be undertaken with an amount of ¢5000.00 include grocery business, stationery business, graphic design firm, web design and software development businesses.
With capital as low as GHC 500, you can start your dream business. Some of the businesses that can be commenced with ¢500 include content creation, social media marketing, freelancing, liquid soap manufacturing, become a copywriter and others.
Registering a sole proprietorship business in Ghana is by far the simplest form of all business registration processes. The sole proprietor business registration only requires one director. This means that the person is directly linked to their business and as such, the person’s personal belongings can be sold to cover up any debt that the business may incur. Here are the steps to registering a sole proprietorship business in Ghana.
In Ghana, registering a sole proprietorship business is very simple. This is in accordance with the sole proprietorship act in Ghana.
READ ALSO: Types of Company Registration in Ghana
What are the types of business? There are six business entities or company types in Ghana with regards to the laws of the state. The company types are;
All businesses or companies in Ghana have an equal probability of becoming successful or profitable. In recent times, some businesses have been identified and tagged as profit-making zone. Some of these include:
Ghana has a long list of registered companies in Ghana. Ghanaian owned companies dominate the list of registered companies in Ghana although you can find externally registered foreign companies within the list as well. Some companies are also registered with the Ghana Investment Promotion Centre (GIPC). The GIPC facilitates investments in Ghana through its registered businesses.
The Constitution of Ghana clearly defines what a company is and how it should be composed and operate. Below is a snippet of the Types of Companies under Act 992;
Section 244: (1) A company and one or more other companies that are directly or indirectly wholly owned by the company may merge and continue as one company without complying with section 259 or 261 where(a) the merger is approved by a resolution of the directors of each of the merging companies; and(b) each resolution provides that the(i)shares of each merging company, other than the transferee company, shall be cancelled without payment or other consideration;(ii) constitution of the transferee company, shall be the same as the constitution of the transferor company; and(iii) directors of each of the merging companies are satisfied on reasonable grounds that the transferee company shall be solvent, immediately after the merger becomes effective.
(2) Two or more companies, each of which is directly or indirectly wholly owned by the same company, may merge and continue as one company without complying with section 259 or 261 where(a) the merger is approved by a resolution of the directors of each of the merging companies; and (b) each resolution provides that(i)the shares of all but one of the merging companies shall be cancelled without payment or other consideration;(ii) the constitution of the transferee company, shall be the same as the constitution of the merging company the whose shares are not cancelled; and(iii) the directors are satisfied on reasonable grounds that the transferee company shall, immediately after the merger becomes effective, satisfy the solvency test.
(3) The directors of each merging company shall not be less than twenty-eight days before the merger is proposed to take effect, giving written notice of the proposed merger to every secured creditor of the company.
(4) The resolutions approving a merger under this section, taken together, shall be deemed to constitute a merger proposal that has been approved.
(5) The directors who vote in favour of a resolution under subsection (1) or (2), as the case may be, shall sign a certificate stating(a) that, in their opinion, the conditions set out in subsection (1) or (2) are satisfied; and (b) the grounds for the opinion of the directors.
(6) A director who fails to comply with subsection (5) is liable to pay to the Registrar an administrative penalty of three hundred and fifty penalty units.
Knowing the types of businesses in Ghana should alert you on the approach to take in registering your company or business. Additionally, in order not to violate the laws of the state, all businesses must be registered at the appropriate quarters and renewed on expiry.