Ghana's business landscape undergoes a transformative shift with the enactment of the Companies Act, 2019 (Act 992). Representing a monumental update from the Companies Act 1963 (Act 179), this new legislation aims to foster an environment conducive to business growth and development.
Key Changes in Act 992
- Improved Corporate Governance and Professionalism
Act 992 prioritizes enhanced corporate governance standards, aiming to differentiate a company as a distinct entity from its members. Key changes include:
- Ratification of pre-incorporation contracts within eighteen months.
- Stricter criteria for appointing directors, company secretaries, and auditors.
- Emphasis on the qualifications, duties, and integrity of directors.
- Introduction of professional qualifications for company secretaries.
- Detailed duties of company secretaries outlined in Section 212.
- Administrative Reforms and Improvements
The establishment of the Office of the Registrar of Companies, separate from the Registrar-General's Department, streamlines the registration and regulation of businesses in Ghana. Noteworthy changes include:
- Abolishment of certificates to commence business, replaced by the Certificate of Incorporation.
- Formation of an eleven-member Governing Board for the Office of the Registrar of Companies.
- Introduction of the Company Bulletin for information sharing.
- Handling of unclaimed dividends detailed under Section 373.
- Enhanced Disclosure and Anti-Graft Measures
Act 992 places a strong emphasis on transparency and anti-graft initiatives, particularly in the operationalization of companies' objects. Key features include:
- Central register for capturing beneficial ownership data of legal persons and arrangements.
- Detailed disclosure requirements regarding a company's proposed stated capital and authorized shares.
- Enhanced Protection of Minority Rights
Section 145 prohibits a company from entering major transactions without special resolution approval. Additionally, minority directors gain protection through derivative action, allowing them to sue in the name of the company.
- Simplification of Processes
Act 992 introduces measures to simplify the company formation process, making it more accessible and aligned with the digital era. Changes include:
- Lowering the age of majority for forming a company to eighteen years.
- Authorization of electronic filings/transactions in line with the Government of Ghana's digital agenda.
- Wide-ranging powers granted to the Registrar, detailed in Section 378 (1).
The Companies Act, 2019 (Act 992), heralds a new era for business in Ghana, incorporating modernized practices and standards. Its provisions aim to facilitate a more efficient, transparent, and accessible business environment. As Ghana embraces the digital age, Act 992 positions itself as a cornerstone for the nation's economic growth.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.