Ghana’s Companies Act, 1963, Act 179 has been replaced by a new Companies Act, 2019, Act 992. The old Act was replaced to reflect current business practices and abolish certain laws that have been obsolete with the passage of time.
The new Act is also expected to facilitate business operations as it has removed certain processes and procedures that eventually became a nuisance to business registration and operation in the country. Some of the features of the new Act include the separation of the duties of the Registrar of Companies from the Registrar General’s Department (RGD) in a bid to facilitate business operations and improve quality of service.
Under the old Companies Law, the RGD was responsible for the registration of companies, partnerships, business names, marriages, adoptions, property rights, among others, which overburdened it to deliver quality services. However, with the hive off, the RGD now will focus on all other duties and leave anything related to business operations to the Registrar of Companies to handle.
The ultra vires rule has also been abolished. The new Act no longer requires companies to file an object clause which limits activities it can engage in. Rather, companies can now engage in multiple activities, only, it would have to state sectors it will be operating in.
Another significant change that has also been introduced is the emphasis given to the work of a company secretary. Directors of a company can only appoint a person as secretary if he or she has obtained a qualification with an offering in company law practice and administration that enables a person to have the knowledge and perform the functions of a company secretary.
Or the person should have been trained under a company secretary for at least three years; or is a member in good standing of the Institute of Chartered Accountants Ghana. The directors’ disqualification regime has also been strengthened. The punitive measures have been widened to apply stiffer punishment on miscreant directors.