Last Thursday evening, Parliament passed the reviewed Companies Act, 2019 to deal exclusively with company registration and business regulation in the country.
The new Act – which awaits presidential assent replaces the Companies Act of 1963. In 2008, then government under the leadership of President John Kufour, in its quest to making the country an easeful environment of doing business, set up a Committee of experts to review the law governing business regulation and operation in the country – which was seen as an embodiment of laws governing corporate practices.
After more than a decade in the quest of instituting a Legislative Instrument (LI) to replace the old Bill, players at both the private and public sectors are now cautioned that there is a new window opening to ensure outmost compliance which seeks to enhance the business development of the country geared towards promoting good corporate governance practices in the country.
The Act, would now establish a new Office – Registrar of Companies, out of the existing Registrar-General’s Department (RGD) to deal exclusively with company registration and business regulation. This new office will be responsible for the appointment of inspectors and will assume the functions of the Official Liquidator under the Bodies Corporate (Official Liquidations) Act 1963.
One of the Institutions that has constantly spearheaded the need to ensure good corporate governance practices at both the private and public sectors of the economy is the Institute of Directors (IoD), as a number of their efforts have now been incorporated into the revised Act.
After a presidential assent of the Act, it would make it obligatory for shareholders and owners of public and private institutions respectively to provide verifiable evidence during the course of submitting annual returns, to prove that their board of directors have undergone training and certification in corporate governance.
The Institute therefor deserves thumbs up for liaising with the Registrar General Department to ensure the current state of the Companies’ Act, not forgetting the great works the Committee on Constitutional, Legal and Parliamentary Affairs of Parliament played in this regard.
Another major enactment in the new Act is the institutionalization of Beneficiary ownership regime. This process would assist in tracking Ghana’s extensive beneficiary ownership in the business sector to know the real owners behind the establishment of businesses.
What this entails is that, owners and shareholders of companies who deliberately hide or misrepresent information on beneficiary ownership in the course of registering their businesses would face some punitive actions including going to jail or other appropriate sanctions meted out to them.
According to the Registrar General Department, beneficiary ownership data submitted in the process of registering businesses will thoroughly be investigated to ensure that the information provided is completely factual. This is meant to enable people who wish to carry out any business transaction with other companies to carry on without having any challenges.
Goldstreet Business believe that since Parliament has passed the Act, it is prudent that the President appends his signature in order to set the Law in motion. What this Paper would want to add is the issue of compliance. It is another idea to have better LI in place, and another measure in ensuring that what has been incorporated in the Law is put into Practice. Compliance is key to ensure the success of this Act.
