Insights into the Companies Act 2019 and Registrar-General's Role

THE NEW COMPANIES ACT,2019 (Act 992) EKKLESIA ROUND TABLE SERIES PRESENTED BY MRS. JEMIMA OWARE (REGISTRAR-GENERAL) 11/11/2021

THE COMPANIES ACT,2019 (ACT 992) INTRODUCTION REGISTRAR-GENERAL S DEPARTMENT (RGD) TYPES OF COMPANIES COMPANIES LIMITED BY GUARANTEE (Guarantee Company) KEY INTRODUCTIONS WITHIN ACT 992 (as applicable to Guarantee Companies) ROLE OF THE SECRETARY THE DIRECTOR UNDER ACT 992 BENEFICIAL OWNERSHIP DISCLOSURE KEEPING COMPANY REGISTERS KEY POINTERS CONCLUSION

INTRODUCTION INTRODUCTION We are the first point of call for every business in this country We are responsible for giving life and ensuring proper dissolution of all Companies in the Country We are Partners to the business community We are here to ensure that as businesses you succeed and there is ease of doing business We serve as a One Stop Shop for Starting a business in the Country

REGISTRAR-GENERALS DEPARTMENT- who we are The Registrar-General is a Department under the Office of the Attorney- General and Ministry of Justice. It is the sole authorized institution with the responsibility for the initial registration and maintenance/custodian of Businesses/Companies/Professional Bodies information, Administration of Estates, Registration of Marriages and Industrial Property Rights. We have been mandated to ensure efficient and effective administration of laws which govern our operations and to provide customer friendly registration services, the compilation of accurate and timely data for National Planning, for the Business Community and the Public at large. We have 5 offices - Accra, Kumasi, Takoradi, Tamale and Sunyani

GENERALS DEPARTMENT DEPARTMENT REGISTRAR REGISTRAR- -GENERAL S LAWS Companies Act, 2019 (Act 992) Incorporated Private Partnerships Act, 1962, (Act 152) Registration of Business Names Act, 1962, (Act 151) Corporate Insolvency and Restructuring Act, 2020, Act 1015 Registration of Trademarks Act, 2004 (Act 664) amended by Trademarks(Amendment)Act 2014 (Act 876) Registration of Textile Designs under Industrial Designs Act, 2003, (Act 660) Registration of Patents Act, 2003 (Act 657) Administration of Estates Act, 1961 (Act 63) Marriages Act , 1884-1985 Cap 127 Professional Bodies Registration Act, 1973, NRCD 143

THE COMPANIES ACT,2019 (ACT 992) THE COMPANIES ACT,2019 (ACT 992) This Act was passed on the 2nd May,2019 Received Presidential assent on 2nd August,2019 Replaces the Companies Act,1963, Act 179 which was used for over 56 years The new Act is very forward-looking and introduces more robust laws on corporate governance, beneficial ownership and promotes ease of doing business.

THE COMPANIES ACT,2019 (ACT 992) THE COMPANIES ACT,2019 (ACT 992) Types of Companies COMPANIES LIMITED BY SHARES COMPANIES LIMITED BY GUARANTEE UNLIMITED LIABILITY COMPANIES. EXTERNAL COMPANIES THESE CAN BE PUBLIC OR PRIVATE

THE COMPANIES ACT,2019 (ACT 992) THE COMPANIES ACT,2019 (ACT 992) COMPANIES LIMITED BY GUARANTEE Is a company which has the liability of its members limited to an amount that the members respectively undertake to contribute to the assets in the event of its being wound up. (S.7 (2)(b) Companies Limited by Guarantee shall not be incorporated with the object of carrying on business for the purpose of making profits other than making profits for the furtherance of its objects. (S.8) They are not for profit but for charitable purposes. As a result, their objects must not connote profit-related activities Eg. clubs, associations or foundations, NGOs, CSOs, Churches . It may be either Public or Private

THE COMPANIES ACT,2019 (ACT 992) THE COMPANIES ACT,2019 (ACT 992) GUARANTEE COMPANY Cont d Where a Guarantee Company carries on business for the purpose of making profits, other than for the furtherance of the objects of the company, the officers and members who are cognisant of that fact will be jointly and severally liable to pay an administrative penalty units of 25 penalty units each day that the company carries on that business. One (1) penalty unit is equivalent to GHC12.00

THE COMPANIES ACT,2019 (ACT 992) THE COMPANIES ACT,2019 (ACT 992) GUARANTEE COMPANY Cont d The total liability of the members to contribute to the assets of the company in the event of the company being wound up shall not at any time be less than the amount of money specified in the application at the time of incorporation. (s.3) Where there is a breach of the amount less that what is specified in the application required for incorporation, every director and member who is cognisant of the breach is liable to an administrative penalty of 500 penalty units.

THE COMPANIES ACT,2019 (ACT 992) THE COMPANIES ACT,2019 (ACT 992) GUARANTEE COMPANY Cont d The Regulations (Articles of Association and Memorandum of Association) are now referred to as the Constitution. A model constitution for Guarantee Companies can be found in Schedule 4, p. 340 Companies are given the option to file a Registered Constitution. The constitution shall be signed by one or more subscribers in the presence of a witness S. 28 The suffix of the Guarantee Company shall be Limited by Guarantee or the abbreviation LBG LBG The suffix for a Public Company Limited by Guarantee shall be PLBG PLBG

THE COMPANIES ACT,2019 (ACT 992) THE COMPANIES ACT,2019 (ACT 992) GUARANTEE COMPANY Cont d At least two (2) qualified directors are required for incorporation A qualified Secretary Subscribers An Auditor who is licensed by the Institute of Chartered Accountant Ghana There are no shares held within this type of Company and therefore no stated capital is required A Guarantee Company cannot be converted to a Company Limited by Shares (S.) 30 (2) (i). A company Limited by shares can rather be converted into a Company Limited by Guarantee (S. 9) Both Ghanaians and Non-Ghanaians may set up Guarantee Companies without any further requirements

THE COMPANIES ACT,2019 (ACT 992) THE COMPANIES ACT,2019 (ACT 992) GUARANTEE COMPANY Cont d Membership of a Guarantee Company continues until the member dies, or validly retires or is excluded from membership. In the event of a liquidation, assets of the company cannot be shared among members. They are required to be transferred to another Guarantee Company having similar objects. Annual Returns are required to be filed in accordance with S.126 of Act 992 Accounting records shall be kept and financial statements to be prepared and circulated in accordance with section 127 to 137 of the Act 992

KEY INTRODUCTIONS WITHIN ACT 992 contd Object Clause no more mandatory (sectors required, however) By default therefor since all churches or guarantee companies cannot carry out profile making objectives, there would be the need to file a Registered Constitution at the point of registration with a Form 3 B Rules governing approval of the names by the Registrar of Companies would still apply with regard to the name of a business and how it can restrict a company to only specific objects to operate in New suffixes have been introduced-S.21 ( Limited Company (LTD), Public Limited Company(PLC), Limited By Guarantee(LBG), Public Company Limited By Guarantee(PLBG), Private Unlimited Liability Company(PRUC),Public Unlimited Liability Company(PUC) Age for applying for incorporation is now 18, not 21 anymore

KEY INTRODUCTIONS WITHIN ACT 992 contd Accounting terms modified to conform to International Financial Regulatory Standards(IFRS) as adopted by the Institute of Chartered Accountants, Ghana (ICAG) Eg. Financial Statements, not Accounts /Income statements, not Profit and Loss Account/Equity shares instead Ordinary shares *Auditor rotation/cooling off period ( 6 years for each Auditor and a cooling period of 6 years (s.139(11))*

KEY INTRODUCTIONS WITHIN ACT 992(Contd) IMPROVED CORPORATE GOVERNANCE AND PROFESSIONALISM Qualification of Company Secretary (s.211 (3)(a) to (e) Companies are now required to appoint a Company Secretary duly qualified under the Act to perform the duties of a company secretary. The directors of a Company shall not appoint a person as a Company Secretary unless that person; has obtained a professional qualification or tertiary level qualification with an offering in company law practice and administration that enables the person to have the knowledge and perform the functions of a company secretary;

KEY INTRODUCTIONS WITHIN ACT 992(Contd) Has been appointed a Company secretary trainee or has held office under a qualified company secretary for at least three (3) years; or is a member in good standing of the Institute of Chartered Secretaries and Administrators or the Institute of Chartered Accountants, Ghana Having been enrolled to practice, is in good standing as a barrister or solicitor in the Republic, 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 of a secretary of the Company.

KEY INTRODUCTIONS WITHIN ACT 992(Contd) KEY INTRODUCTIONS WITHIN ACT 992(Cont d) Duties of Company Secretary (s. 212 (a) to (j) It includes but is not limited to: Assisting the Board to comply with the Constitution of the company and with any relevant enactment; Keeping and maintaining the statutory Registers, books and records of the company; Ensuring that all the statutory Forms and Returns are duly filed with the Registrar

KEY INTRODUCTIONS WITHIN ACT 992(Contd) Duties of Company Secretary (s. 212 (a) to (j) Providing the Board with guidance as to their duties, responsibilities and powers and on changes and development in the laws affecting the operation of companies Informing the Board of legislation relevant to or affecting meetings of shareholders and directors and their failure to comply with the legislations and reporting accordingly at any meeting ; Advising the Directors on their responsibilities as directors

KEY INTRODUCTIONS WITHIN ACT 992(Contd) A person shall not be appointed a director unless the person before the appointment: Makes a statutory declaration (S. 13 (2)(h) ) to the company to the effect that the person has not within the preceding five years of the application for incorporation been: Charged with or convicted of a criminal offence involving fraud or dishonesty

KEY INTRODUCTIONS WITHIN ACT 992(Contd) DIRECTORS Cont d Charged with or convicted of a criminal offence relating to the promotion, incorporation or management of a company A director or senior manager of a company that has become insolvent and if the person has been, the date of insolvency and that particular company He should have consented to be a director and filed the consent within 28 days.

KEY INTRODUCTIONS WITHIN ACT 992(Contd) DIRECTORS Cont d DIRECTORS Cont d New Forms have been designed as a result of new requirements under Act 992. All these Forms can be downloaded from our website at www.rgd.gov.gh Statutory Declarations from directors Consent letters from directors and secretary required Confirmation that secretary meets any one of the legal qualifications Completion of BO Forms (BO 1,BO 2,BO 3 and BO 4) Two directors and a secretary may sign in place of company seal etc

KEY INTRODUCTIONS WITHIN ACT 992(Contd) BENEFICIAL OWNERSHIP DISCLOSURE AND THE CENTRAL REGISTER The Act makes provision for the disclosure of Beneficial Owners of companies. The Registrar of Companies is to maintain a Central Register containing information on Beneficial Owners Each Company must set up a Register of Members, maintain and update a Beneficial Ownership Register in this Register and submit to the Registrar of Companies who keeps the Central Register Information on such Beneficial Owners is to be submitted to the Registrar of Companies for registration

KEY INTRODUCTIONS WITHIN ACT 992(Contd) BENEFICIAL OWNERSHIP DISCLOSURE (Cont d) Definition of Beneficial Ownership (First Schedule) means an Individual Who directly or indirectly ultimately owns or exercises substantial control over a person or company Who has a substantial economic interest in or receives substantial economic benefits from a company whether acting alone or together with other persons

KEY INTRODUCTIONS WITHIN ACT 992(Contd) BENEFICIAL OWNERSHIP DISCLOSURE (Cont d) On whose behalf a transaction is conducted; or d. Who exercises significant control or influence over a legal person or arrangement through a formal or informal arrangement Most Guarantee companies Beneficial Owners would be anyone or group of persons who probably exercises significant control in the appointment of the Board of Directors since the subscribers do not own shares as a profit making company would

KEY INTRODUCTIONS WITHIN ACT 992(Contd) BENEFICIAL OWNERSHIP DISCLOSURE (Cont d) Time to submit BO information :- Incorporation of Companies Registration of External Companies Filing of Annual Returns Amendment of BO Information Entities required to submit BO information:- (Private and Public) Company with Shares Company Limited by Guarantee External Company

PARTICULARS OF BO TO BE FILED PARTICULARS OF BO TO BE FILED The full name and any former or other name The date and place of birth The telephone number, residential, postal, digital and email address, A TIN/NIA Card number comprising the nationality, national identity number, passport number or other appropriate identification and proof of identity Place of work and position held The nature of the interest including the details of the legal, financial, security, debenture or informal arrangement giving rise to the beneficial ownership; and Confirmation as to whether the beneficial owner is a politically exposed person

KEY INTRODUCTIONS WITHIN ACT 992(Contd) REGISTER OF MEMBERS S. 35 Shall contain names of subscribers/members, addresses, shares(for Companies Limited by Shares) held paid for and remaining due), nature of interest held, date of ceasing to be a member, BO info etc *A Company may arrange for a Registration Officer to undertake these duties externally. Register of Debentures S. 99 Shall be kept at the address at which the Register of Members is kept and similar rules shall apply

KEEPING COMPANY REGISTERS contd Branch Register S. 106 A company may keep a Branch Register of all its shareholders(Subscribers as in the case of Guarantee Companies), Debenture Holders and Beneficial Owners residing in a particular country outside the Republic and a duplicate kept at the place where the Principal Register is kept Copies of charges S. 120 Copies must be kept at the Registered Office and at any other office where the Register of Debenture holders is kept. (Debenture holders would only refer to Companies limited by shares).

KEEPING COMPANY REGISTERS contd Interest Registers S. 196 A director s interests in a proposed contract must be disclosed to the directors in a meeting or in writing and be entered in the Interests Register - The Register shall state where any documents containing details of the interest may be inspected - Must be open for inspection at the Registered Office and during a general meeting

KEEPING COMPANY REGISTERS contd KEEPING COMPANY REGISTERS cont d Register of holdings of directors S. 210 - Must contain the shares held by the director in the company or an associated company - Number and description of shares - Amount of debentures of the company or an associated company that the director ultimately benefits from - This section refers to only Companies Limited By shares Register of particulars of directors and company secretaries S. 215(includes substitute directors)

OTHER REFORMS TO NOTE RGD funtions as a One Stop Shop for Starting a Business in Ghana Linked up with GRA through our software that generates a TIN Through the digital address to provide a temporary Business Operating Permit(BOP) from your MMDA valid for 90 days. Deployment of data to SSNIT with the completion of each registration to ensure social security payment for employees From May 1st, 2021 every director, Secretary and subscriber of a Company Limited by guarantee would need to submit the photocopy of a National Identity Card (NIA) to replace the TIN

KEY POINTERS KEY POINTERS All Companies registered before 2012 must update their information through a re-registration exercise. The Registrar has started striking off names of companies that fail to update their information through this exercise. Over 2,000 churches registered since 2011 have failed to file their Annual Returns and are therefore not in good standing. The names due to be stricken off the Register have been posted on our website, www.rgd.gov.gh. 1000 of these names would be de-activated by the end of November,2021 after having been called up to rectify their standing yet failing to do that. All existing Companies must declare their Beneficial Owners by December 31st, 2021. New Companies registering must present copies of NIA cards and also complete BO forms.

KEY POINTERS (contd) KEY POINTERS (cont d) MANDATORY CHANGE OF NAME BY EXISTING COMPANIES Every existing company must change its name and mandatorily adopt a Constitution by Special Resolution in accordance with Act 992. The company shall deliver to the Registrar a Special resolution indicating whether they would present a Registered Constitution or adopt a Standard Constitution as seen in Act 992. The amended Name in compliance with the new suffixes ending the name should be the name in the Adopted Constitution. All churches must therefore pass a resolution to amend their names to end with Limited By Guarantee or LBG or if its a Public company, Public Company Limited By Guarantee or PLBG. This should be done latest by June, 2022.

YOUR OBLIGATIONS YOUR OBLIGATIONS Provide accurate data, updated data on a timely basis Provide a valid email and phone contact File all changes to the Company within 28 days Companies to file Annual Returns and Financial Statements else face sanctions Comply with the provisions of the Companies Act, 2019 (Act 992)

CONCLUSION CONCLUSION The duties and rights of companies have been enhanced for the strengthening of corporate governance practices and to further ease the processes of doing business in Ghana. The decoupling of the Office of the Registrar of Companies to be focused on the administration of Businesses only will ensure the needed delivery of quality service for the good of the business community and our cherished Stakeholders. This decoupling is expected to take place as soon as the composition of the Board is completed before the end of this year. It would be headed by a Registrar of Companies The Registrar-General s Department would still remain under the head of the Registrar-General