Kwadwo and Kwesi are friends who recently graduated from the University and decided to set up a fashion design business. After considering their options, they decided to set up a limited liability company to conduct the business. They are considering calling their business either 'F U Fashion' Limited or 'Great University Trends' Limited. Advise Kwadwo and Kwesi on the process of incorporation and commencement of business under the Companies Act, 2019, (Act 992)

Question

What will be an ideal response?

Answer 1

Answer:

Section 13: (1) An application for incorporation shall be made in the prescribed form and delivered to the Registrar.

Section 14: (1) Where the Registrar is satisfied that the application for incorporation of a company complies with this Act, the Registrar shall, after payment of the prescribed fee, certify under the seal of the Registrar that the company is incorporated and in the case of a limited liability company, that the liability of the members is limited. (2) From the date of incorporation, the company becomes a body corporate by the name contained in the application for incorporation and, subject to section 13, is capable of performing the functions of an incorporated company.

Section 13, of Act 992 which adds on the requirements in Section 14 of the old Companies Act 1963, provides that all applications to register a company must include the following:

i. The name of the company and an indication of the type of proposed company;
ii. The nature of the proposed business if the company is registered with an object;
iii. The address of the proposed registered office, principal place of business of the company in the Republic, telephone number and the post office box, private mail bag or digital address of the registered office of the company;
iv. The electronic mail address and website of the company, if available;
v. The following particulars of each subscriber:

a. date, place of birth and nationality;
b. present full name and any former name;
c. residential, occupational, postal and electronic mail addresses and telephone contact; and

vi. The following particulars of each proposed director of the proposed company:
a. present full name and any former name;
b. particulars of any business occupation and other directorships held by the director
c. residential, occupational, postal and electronic mail addresses and telephone contact;

vii. A statutory declaration by each proposed director of the proposed company indicating that within the preceding 5 years, that he/she has not been
a. charged with or convicted of a criminal offence involving fraud or dishonesty;
b. charged with or convicted of a criminal offence relating to the promotion, incorporation or management of a company; or
c. declared insolvent or if that proposed director has been insolvent, the date of the insolvency and the particulars of that company;

viii. The consent of each proposed director;
ix. The following particulars of the proposed company secretary of the proposed company:
a. present full name and any former name;
b. usual postal, occupational and electronic mail address;
c. residential address in the case of an individual; and
d. business occupation

x. The following particulars of the proposed auditor of the proposed company:
a. present full name and any former name;
b. postal and electronic mail addresses and telephone number;
c. residential address in the case of an individual;
d. consent of the auditor;

xi. The following particulars of each subscriber for a proposed company with shares:
a. present full name and any former or other name;
b. date and place of birth;
c. telephone number;
d. nationality and proof of identity;
e. residential, postal or email address, if any;
f. place of work and position held;

xii. The following particulars in respect of each beneficial owner of the proposed company:
a.full name and any former or other name;
b. date and place of birth;
c. telephone number;
d. nationality, national identity number, passport number or other appropriate identification and proof of identity;
e. residential, postal or email address, if any;
f. place of work and position held;
g. the nature of the interest including the details of the legal, financial, security, debenture or informal arrangement giving rise to the beneficial ownership; and
h. confirmation as to whether the beneficial owner is a politically exposed person;

xiii. The following details in the case of a company that has shares:
a. the amount of proposed stated capital
b. the number of authorised shares of the company for each class

xiv. In the case of a proposed company limited by guarantee the specified amount up to which the member under- takes to contribute to the assets of the company, in the event of the company being wound up while that person is a member or within a stipulated period after ceasing to be a member, for payment of the costs, charges and expenses of winding up, and the adjustments of the rights amongst members.
xv. Evidence of the identity and place of residence of the applicant(s) at the time of the delivery of the completed application form for incorporation.

Additionally, the application must be endorsed with a signature of each subscriber if the company is registered with shares. The signature of the subscriber must be accompanied by name of the subscriber, the number of shares the subscriber takes and the cash price payable for the shares.

Furthermore, at the time of incorporation, the proposed company should have at least 2 directors with one director ordinarily resident in Ghana (Section 171, Act 992)

When does incorporation become effective?

The proposed company becomes a body corporate on the date of incorporation after payment of the prescribed fees (Section 14, Act 992) and issuance of a certificate of incorporation to the company by the Registrar.

According to the Companies Act 2019, Act 992, the last names of any company are as follows:

i. In cases of a private company limited by shares, “Limited Company” or the abbreviation “LTD”;
ii. In cases of a public company limited by shares, “Public Limited Company” or the abbreviation “PLC”;
iii. In cases of a company limited by guarantee, “Limited by Guarantee” or the abbreviation “LBG”;
iv. In cases of a private company unlimited by shares, “Private Unlimited” or the abbreviation “PU”;
v. In cases of a public company unlimited by shares, “Public Unlimited Company” or the abbreviation “PUC”.

Certificates to commence business is abolished and only certificates of incorporation will now be issued