The Registrar General’s Department, has warned that companies that fail to adhere to regulations in the new Companies Act, will face sanctions.
The Department, which recently threatened to delete the names of several companies in the companies’ register that have not updated their information, says these steps are being taken to sanitize the business space and also ensure that companies thrive by doing business the right way.
President Akufo-Addo assented to the New Companies Act, on August 2nd 2019. The Companies Act, 2019 has been in the works since 2018 and replaces the Companies Act, 1963 (Act 179).
At a very high level, the new Act seeks to introduce improved corporate governance standards for companies operating in Ghana.
The Act draws on the experience of more developed Jurisdiction and specifically includes international best practices from jurisdictions such as the United Kingdom, New Zealand, South Africa and Mauritius.
Start-ups in particular have thus been urged to seek understanding of the new Companies Act to avert lawsuits that may distract their operations.
The impact of the legislation will be felt most in corporate administration with the creation of the Office of Registrar of Companies, an autonomous governmental body. The Registrar of Companies would operate separately from the Registrar Generals Department and will be solely responsible for the registration, regulation and winding up of corporate bodies in the country.
The new Act introduces reforms to company registration and regulation with the overall aim of simplifying the regulatory framework surrounding the incorporation and operation of companies while improving existing corporate governance standards that exist in the country.
Speaking at a sensitization workshop for members of the Ghana National Chamber of Commerce and Industry, Assistant Registrar at the Registrar General’s Department, Linda Quao, explained some of the activities that will attract sanctions.
“A director who does not act in the best interest of the company, and promote business in a manner that is faithful, diligent and skillful, will be held accountable for their actions or inaction. The director of a company shall not appoint a company secretary unless the person has obtained professional qualifications to be able to do that” she cautioned.
The Chief Executive Officer of the Chamber, Mark Badu Aboagye, is hopeful the workshop will go a long way to aid in the compliance of the law by members.
“One of our functions is to be able to sensitize our members and also educate them whenever there are new laws and acts that affect the business environment. This act is definitely going to affect their businesses, so it is important we break it down for ordinary business persons to understand” he said.