Mechanics of Incorporation of a Company in Ghana: Full Legal Guide Under the Companies Act 2019

By SETH DOE ESQ AND PHILIPA HAGAN MENSAH

Introduction

A company is a creature of law. Under the Companies Act 2019 Act 992 any one or more persons may form an incorporated company by complying with the statutory registration process. The mechanics of incorporation are the practical and legal steps that move an idea or business plan into a separate legal person with the capacity to own property, sue and be sued. This essay examines each step in that process under Act 992, explains the legal consequences of each step, highlights recurring practical pitfalls, and integrates the leading authorities that shape how the Registrar and the courts treat incorporation in Ghana.

1. Who May Incorporate and Basic Statutory Foundation

Sections 6 and 12 of Act 992 set the starting point. Any natural or corporate person may be a promoter. A natural person must be at least 18 years old to apply. Promoters lead the pre-incorporation effort. Their actions determine the company type registered, the initial governance architecture, and the identity of the first members. Promoters owe fiduciary duties to the yet-to-be-incorporated company and to potential subscribers. These duties include good faith avoidance of secret profit, disclosure of material interests and reasonable care and skill.

2. Pre-Incorporation Practical Work

Before the application reaches the Registrar, most of the legal risk is created or avoided. Key pre-incorporation tasks are name reservation, drafting the constitution if any, determining share structure, choosing the registered office, appointing the first directors and securing consents and statutory declarations.

Name reservation under sections 21 and 22 of Act 992 requires a search and an application to the Registrar. The Registrar will reject names that are identical, misleading or undesirable. Some restricted expressions, such as bank insurance, municipal or chamber of commerce, need prior approval. Reserved names hold for 30 days and can be renewed.

Deciding whether to adopt a registered constitution is a major choice. Act 992 allows incorporation with or without a constitution. Where a constitution is adopted, it becomes the company’s primary contract and may limit directors’ powers, but any provision inconsistent with the Act is void.

Choosing the share structure requires clarity. For a company limited by shares, the promoters must specify the authorised and issued share capital, the classes of shares, rights attached to each class, consideration to be paid, and any preemption or transfer restrictions. Act 992 also requires disclosure of beneficial owners, so promoters must collect accurate data and supporting identification.

The registered office and principal place of business must be determined and recorded. Section 25 and Form 3 require these addresses and mandate updates within 28 days of change.

Appointing the first directors and the company secretary is a legal precondition to smooth incorporation. Directors must consent in writing and file statutory declarations as required by section 13 and related forms. The secretary must be appropriately qualified where required and must consent in writing.

3. The Incorporation Application: Forms Content and Signatures

The incorporation process starts with the filling or completion of the prescribed form and delivery of the same to the Registrar of Companies (the Registrar).  Section 13 of Act 992 sets out the information and particulars relevant for filling the prescribed registration form. For instance, Section 13 (1) of Act 992 says that, “an application for incorporation shall be made in a prescribed form”. Then Section 13 (2) outlines the content of the prescribed form as follows:

1. The name of the company
2. The type of company
3. The objects of the company
4. The registered address, email address, website address, and digital address of the company.
5. The present full names, date of birth, contacts, email and residential addresses of the proposed directors.
6. Consent of each proposed director. The required form to be completed by each proposed director is Form 26 (A).
7. The present full name, date of birth, contacts, email and residential addresses of the proposed company secretary.
8. The consent of the proposed director. The required form to be completed by the proposed company secretary is Form 26 (B).
9. A statutory Declaration by each proposed director. Each proposed director must declare that they have never been charged with or convicted of the offence of dishonesty in the promotion or formation, or management of a company in the last five years. The required form for Directors’ Statutory Declaration is Form 26 (C).
10.  The present full name, date of birth, contacts, email and residential addresses of the company auditor, as well as consent of the proposed company auditor.
11. The present full name, date of birth, contacts, email and residential addresses, nationality, national identity number, passport number, place of work and position held, etc., of each beneficial owner and a confirmation as to whether the beneficial owner is a PEP (politically exposed person).
12. In the case of a company that has shares: (i) the amount of proposed seated capital, as defined in section 68; (ii) the number of authorised shares of the company for each class; and Details of the company’s capital.
13. In the case of a proposed company limited by guarantee, the specified amount up to which the member undertakes to contribute to the assets of the company, in the event of the company being wound up.

4. Identity Verification and Statutory Declarations

When applying, the Registrar must be satisfied as to the identity of the persons involved. Section 13(6) requires evidence of identity and place of residence. Directors file statutory declarations to confirm they are not disqualified. These requirements protect third parties and ensure accurate beneficial ownership data. In practice, promoters should collect certified identity documents and proof of residence and maintain clean audit trails for every consent and declaration.

5. Registrar’s Examination And Issuance of the Certificate

Section 14(1) empowers the Registrar to examine the application. If satisfied that the requirements are met and fees paid, the Registrar certifies incorporation under the seal and issues a certificate of incorporation. For limited liability companies, the certificate indicates that members’ liability is limited.

The legal effect is immediate. From the date on the certificate, the company becomes a body corporate with the name it registered and the capacity to perform the functions of an incorporated company, subject to limits in the Act and any registered constitution.

Two connected legal principles are crucial here. First, the certificate is conclusive evidence of incorporation. The Privy Council in Moosa Goolam Arif v Ebrahim Goolam Ariff 1913,[1] affirmed that even if statutory conditions were not strictly complied with, the Registrar’s certificate was conclusive for all purposes. In England, Peel v London and North Western Railways Company 1907[2] similarly underscores that once the certificate is issued, the regularity of prior proceedings is not ordinarily open to challenge.

Second, however, there are exceptions to absolute finality. The courts retain equitable and public interest remedies where incorporation was obtained for unlawful purposes or the Registrar acted outside legal bounds. In Republic v Registrar of Companies ex parte Attorney General 1991[3], the registration of a company formed to facilitate prostitution was quashed as contrary to public policy. The proper remedy where incorporation was wrongly granted is usually winding up or certiorari rather than striking the certificate as void in rem.

6. Cases That Shape The Mechanics and Their Practical Lessons

Adehyeman Gardens Ltd v Assibey [4]clarified that subscribers at incorporation are members by operation of law and their membership is not conditional upon full payment of the consideration except where forfeiture or other valid contractual provisions intervene. That explanation reinforces the legal reality that the act of subscription creates immediate membership rights recognised on registration.

Dupaul Wood Treatment v Asare [5]is often relied upon for the proposition that incorporation occurs when the constitution or regulations are delivered to and entered into the Registrar’s register. Practically, this means promoters must ensure the documents filed are in final form because the act of registration has legal consequences that third parties may rely upon.

Derrick Adu Gyamfi v Attorney General [6]tested the constitutionality of certain statutory declaration requirements that might disqualify a person who was merely charged with an offence. The Supreme Court held that disqualifying a person solely on the ground of being charged undermines the presumption of innocence under Article 19 of the 1992 Constitution. The practical lesson for promoters and practitioners is to ensure that statutory declarations correctly reflect case law constraints and constitutional protections and that any disqualification is based on conviction or other legally sustainable grounds.

R v Registrar of Joint Stock Companies Ex parte Moore [7]and R v Registrar Ex parte Bowen [8]show that the Registrar has discretion to deny registration where the objects are unlawful or where the proposed registration would be incompatible with statutory requirements. But the Registrar’s refusal can be judicially reviewed and reversed if unlawful. Practically promoters must ensure that the business proposed is lawful in Ghana and in any jurisdiction where the company intends to operate and that documentary forms and names comply with statutory constraints.

Cowries Finance Ltd v Pako Bay[9] reinforces that the certificate and the Registrar’s endorsement of a change of name are decisive. Once a special resolution changing the name is registered and certified the company remains the same legal person irrespective of incidental failure to update letterheads.

Moosa Goolam Arif and Peel emphasize certainty. R v Registrar Ex parte AG and Moore emphasize public interest checks. Derrick Adu Gyamfi emphasises constitutional limits on documentary requirements. Adehyeman shows the legal effect of subscription. Taken together these authorities create a balance between certainty for third parties and protective exceptions to prevent abuse.

7. Post-Incorporation Obligations That Immediately Follow Registration

Incorporation is not the end of the mechanics. Immediately on registration, the company must:

1. Open and maintain statutory registers, including the register of members, register of directors and company secretary and beneficial ownership register
2. Hold a first board meeting to appoint officers, adopt accounting policies, approve banking arrangements and authorise the opening of bank accounts
3. File the constitution and returns required by Act 992 where incorporation occurred without a constitution and one is later adopted
4. Register for taxes, VAT, PAYE and obtain necessary business licences and sector-specific permits where applicable
5. Ensure compliance with stamp duty and pay any administrative penalties for errors or omissions under section 17 of Act 992

Failure to comply generates administrative penalties and undermines the company’s ability to transact with banks, investors and regulators.

8. Common Practical Pitfalls and How to Avoid Them

1. Incomplete or inconsistent subscriber signatures. Remedy by preparing final constitution and subscription page in one sitting and ensuring witnesses and signatures are complete
2. Inadequate proof of identity for directors and beneficial owners. Remedy by collecting certified copies of national ID passports and utility bills and attaching them to the file
3. misstatement of share capital and failure to state paid-up amounts. Remedy by determining the exact nominal or stated capital and ensuring the stated capital matches the Form 26 documents
4. selecting a name that is too similar to an existing company or includes restricted words. Remedy by an exhaustive name search and early application for pre-approval for restricted words
5. Appointing unqualified company secretaries or failing to obtain consents. Remedy by checking statutory qualifications and obtaining written consents early
6. assuming the certificate cures all defects. Remedy by checking the legality of objects and purpose, because public policy and illegality remain grounds for court action

9. Special Topics That Affect the Mechanics

9.1 Incorporation without a constitution

Act 992 permits incorporation without a constitution. Where a company is formed without a registered constitution, the default rules in the Second Schedule apply. Promoters who opt for no constitution should nevertheless clearly understand those default rules because they will govern internal governance and rights until the members adopt a constitution.

9.2 External companies

Foreign companies with a fixed place of business in Ghana must register as external companies. the mechanics require additional documentation and compliance with the Ghana Investment Promotion Centre Act[10], where foreign participation triggers sector-specific approvals.

9.3 Ultra vires concerns and capacity

Act 18 gives a company full capacity. If a constitution restricts activity, section 19 of Act 992 protects third parties and provides internal remedies for members to challenge contraventions. From a mechanics perspective, promoters should weigh the benefit of restricting corporate powers against the commercial certainty that unrestricted capacity gives third parties.

10. Step-By-Step Practical Checklist for Promoters and Practitioners

1. Decide the company type and private or public status
2. Conduct name search, reserve name and obtain approval for restricted words
3. Prepare the constitution if desired, and draft the subscription page and list of first directors and company secretary
4. Collect certified identity and residence documents for all directors, subscribers, beneficial owners and the secretary
5. Agree share structure and prepare Form 26 stating capital and Form 6 particulars of directors and secretary, and Form 4 beneficial ownership
6. obtain written consents, statutory declarations, and, where required pre pre-clearance from sectoral regulators
7. Pay required fees and stamp duty, and prepare payment receipts
8. Submit a complete application and supporting documents to the Registrar
9. On receipt of the certificate, open bank accounts, register with tax authorities and file any sectoral licences
10. Convene the first board meeting and record minutes, and maintain statutory books

Conclusion

Mechanics matter. The statutory structure in Act 992 creates an efficient predictable path to corporate personality but the law balances certainty with public interest safeguards. The certificate of incorporation grants legal existence and commercial legitimacy. At the same time the Registrar and the courts retain tools to prevent misuse where the objects or registration offend public policy or the law. Promoters must therefore marry careful legal compliance with practical commercial planning. If the pre registration steps are disciplined and documentation is accurate the process from application to incorporation becomes a matter of execution rather than legal risk.

[1] [1912] UKPC 49, (1912) 14 Bom LR 121

[2] [1907] 1 Ch 5

[3] [1991] 2 GLR 403

[4] [1984–86] 1 GLR 303

[5] [2005–2006] SCGLR 667

[6] [2023] DLSC 16991

[7] (1878) 3 QBD 216

[8] (1878) 3 QBD 246

[9] [1999] DLHC 123

[10] Ghana Investment Promotion Centre Act, 2013 (Act 865)