Author: Barbara Ewoenam A. Kukah

The aim of this article is to provide entrepreneurs with relevant information on the various  types of business entities and associated legal structures to be considered when establishing a  business in Ghana.

The body responsible for business entity registration in Ghana is known as the Registrar  General’s Department

There are 6 main types of business entities in Ghana that you can choose from.

  1. Sole Proprietorship 

This is very common in Ghana. Sole proprietorship consists of registering a business  name under which a person’s business is to be run. It is governed by the Registration  of Business Names Act, 1962 (Act 151). A sole proprietor cannot carry any business  with respect to banking and communications industries. A significant amount of  capital is not required to start a sole proprietorship. It is cheap and simple to form and  operate, and may enjoy greater flexibility of management, fewer legal controls, and  fewer taxes. The down side is that the business owner is personally liable for all debts  incurred by the business. This means if you incur any loss in running the business,  your personal items can be sold to pay the debt.

You can register your business name at the Registrar-General’s Department (RGD) by  purchasing or downloading forms, filling them and submitting to the RGD with the  prescribed fee. After you are given the business registration certificate, you have to  renew it every year at a fee.

  1. Partnership 

This is made up of at least two (2) and at most twenty (20) people who agree to  contribute money, labor, or skill to operate a business. Each partner shares the profits,  losses, and management of the business, and each partner is personally and equally  liable for debts of the partnership. Partnership is regulated by the Incorporated  Private Partnerships Act, 1962 (Act 152) and the Incorporated Private Partnerships  (Amendment) Act, 2012 (Act 839). Formal terms of the partnership are usually contained in a written partnership agreement or deed. This form of business entity is  usually used by lawyers, accountants, and other professionals.

Registration is done at the RGD by buying, filling, and submitting the forms together  with the prescribed fees and a partnership deed/ agreement.

Once registrations is completed, it is generally implied that each partner has the  authority to legally transact the partnership authorized business as an agent of the  partnership so that partners are generally bound by any actions and decisions taken by  another partner in the name of the partnership once it falls within the partnership  agreement.

  1. Companies 

The laws of Ghana, particularly the Companies Act, 2019 (Act 992), recognize four kinds of companies- companies limited by shares, companies limited by guarantee, unlimited liability companies, and external companies.

  • Company limited by shares: The company raises money by issuing shares. A  person can buy shares without paying the full cost of the shares immediately.  Should the company run into debt or be wound down (liquidated), the only money  the shareholder is liable to pay is the remaining price of the shares (if any). That is  why it is known as limited liability company. To form this, you need at least one  shareholder, two directors, a company secretary and an auditor. You can  register your company at the Registrar-General’s Department by filling the  prescribed forms and submitting them with the prescribed fee. You are also  required to pay the value of 0.5% stamp duty on your stated capital (the capital  you use to start the business). The name of the company must end in “LTD” or  “company limited”. A public limited company’s name shall end with “public  limited company” or PLC”. Letters must be submitted by the directors, company  secretary and auditor indicating their consent to the appointment. The directors  must also submit a statutory declaration stating whether they have been, among  others, convicted of offences involving fraud or dishonesty, in the last five (5) years. The advantage of this type of company is that the company is a completely  separate legal person from the shareholders. The company can do business in its  own name, sue, and be sued, and continue operating even after the original owners  are dead or are no longer interested in running it and have sold their shares. As an  officer of the company, you cannot be held personally responsible for your actions  in an official capacity (except in exceptional circumstances). However, a company is more expensive to register than a sole proprietorship or a  partnership. The process of running it is also more relatively more cumbersome, as you are required to file various documents within a business year to notify the  RGD of changes, meetings, and decisions.
  • Company limited by guarantee: These are companies that are not formed for the  purpose of making profit. It may be an NGO, a charity, a union, society, council,  church, etc. Although they are not formed to make profit but to carry out some  objectives, the company may undertake activities to make profit for the purpose of  funding its activities. Members guarantee to pay various amounts of money should  the company run at a loss or be wound up. This is the extent of their liability (i.e,  the amount which they guarantee or pledge to pay in the event of a winding up).  The name of the company must end in “Limited by Guarantee” or “LBG”.

To register, buy and fill the required forms, submit them to the RGD with the  prescribed fees, a declaration and a consent form from qualified auditors. Renewal  is to be done yearly at a fee.

An LBG helps people to carry out their objectives through a body that is separate  and distinct from them, and which can live on even after they themselves are no  longer present or available to personally carry out those objectives. However, it is  not for the purpose of making profit. Hence if your main aim is to make profit,  you will be better served by registering another type of business entity.

  • Unlimited Company: This kind of company also issues shares as a way of  raising capital but the liability of the members is distinguished from that of a  company limited by shares. The procedure for registration is similar to that of a  limited liability company. Like a limited liability company (LLC), it is a body that  exists on its own and can carry out business, own property, sue and be sued, and  perform the functions that a legal adult can.

The name of a private unlimited company shall end in “Private Unlimited  Company” or “PRUC” while a public unlimited liability company’s name shall  end in “Public Unlimited Company” or “PUC”.

  • External Company: This is a company formed outside Ghana which has an established branch, office, or place of business of the company in Ghana. With  this type of business entity, the Company must hire at least a local manager to  manage the business of the company and an agent in Ghana who is authorized to  accept service of documents on behalf of the company (This could be a corporate  body). A notarized Power of Attorney must be executed in favor of the local  manager. Also required is the filing of the articles of association of the head  company duly notarized by a notary public in the country of registration and a  certificate of incorporation of the head office duly notarized in the country of  registration.

Ultimately, the kind of business you want to do, your objectives for that business and the  amount of capital you have will help you determine which type of business entity to register.  Regardless of which business entity you decide to operate, the following information will be  useful and relevant to you:


Companies with foreign participation (non-Ghanaian shareholders) shall after  incorporation or registration and before commencement of operations be  registered with GIPC. The GIPC has set out the various minimum capital  requirements (least amount of money to start the business with) for businesses to  be established by , namely:

  • Joint venture (non-Ghanaian/s and a Ghanaian with at least 10% equity  participation) – USD 200,000.00 (in either caah or capital goods)
  • Wholly–owned foreign business: – USD 500,000.00 (in either cash or capital goods)
  • General trading company: USD 1,000,000.00

Registering with the GIPC comes with various benefits for companies including, an  entitlement to an immigrant quota (that is, the maximum number of expatriates the foreign  investor can employ), based on the company’s paid up capital.


If your business employs people, you are required to register with SSNIT. Ghana  operates a three tier system under the National Pensions Act, 2008 (Act 766),  amended by the National Pensions Amendment Act, 2014 (Act 883). Under this,  the employer contributes 13% of the employee’s salary, and deducts 5.5% of the  employee’s salary for SSNIT contributions. Out of this 18.5%, the employer pays  13.5% under Tier 1 to be managed by SSNIT. The remaining 5% is paid to an  approved Trustee to be managed under Tier 2. Tier 3 is voluntary. The employees  decide the percentage to contribute and choose a private pension service provider  to manage the fund.


Under the Income Tax Act 2015 (Act 896), companies are required to pay taxes.  companies are therefore required to register with the Ghana Revenue Authority.  Companies pay a corporate tax of 25% on their profits in the year. Self employed persons like sole proprietors are also required to pay income tax while employees  have Pay As You Earn contributions withheld from their salaries as income tax.

Businesses that provide goods and taxable services are required to charge Value  Added Tax (VAT) on the goods or services provided as well as National Health  Insurance Levy and the Covid-19 Recovery Levy.



While this article focuses on the general scope of each of the business structures in  Ghana, it is important to note that specific factors to your proposed or current  business will influence your decision on a suitable legal structure for your business. It is recommended that you seek legal counsel when deciding on the  structure for your business.


Nartey Law Firm is a leading corporate and commercial law firm in Ghana providing legal  services to individuals, domestic and international businesses. Ensuring the success of our  clients’ objectives is at the core of what we do. Comprised of a dedicated team of lawyers with extensive experience in corporate, commercial and international law and litigation,  we pride ourselves with the diligent execution of all client matters, whilst guaranteeing an  uncompromising standard with respect to excellence in service delivery. Some of our focus  areas are Real Estate, Trade and Commerce, Banking and Finance, Regulatory Advisory, Capital Markets and Mergers and Acquisitions.



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Disclaimer: This publication is for information purposes only and is not intended to  constitute legal advice. If you require information on any matter discussed in this article,  kindly reach out to the firm directly.

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