Procedures
under the Companies Act, 2019 (Act 992) that Commercial Lawyers Must Know
The Companies Act, 2019 (Act 992) is a critical
piece of legislation for commercial lawyers in Ghana. It modernizes the
framework for the incorporation, operation, governance, and dissolution of
companies, ensuring compliance with international standards. Commercial lawyers
must be familiar with the procedural requirements under this Act to effectively
advise clients and manage corporate transactions. Below is an overview of key
procedures under the Companies Act that every commercial lawyer practicing in
Ghana should know.
1.
Incorporation of a Company
The process of incorporating a company is
fundamental to commercial practice.
Steps:
Selection of Company Type:
Determine the type of company to be incorporated
(e.g., private limited company, public company, company limited by
guarantee, or unlimited company).
Reservation of Name:
Apply to the Registrar-General’s
Department (RGD) to reserve the company name, ensuring it is unique
and not misleading.
Preparation of incorporation documents:
Draft and file key documents, including:
Company Constitution: Governs
the internal management of the company.
Form 3 provides details about the
company’s directors, secretary, and auditors.
Statement of Shareholders: Details
the ownership structure.
Payment of Fees:
Pay registration fees, which vary based on the type
of company and its share capital.
Issuance of Certificates:
Upon successful registration, the RGD issues a Certificate
of Incorporation and a Certificate to Commence
Business.
Role of Commercial Lawyers:
Advise clients on the appropriate company structure
based on their business needs.
Draft and file incorporation documents, ensuring
compliance with the Act.
Conduct due diligence to avoid legal disputes over the
company name or shareholding structure.
2.
Corporate Governance and Compliance
Commercial lawyers must ensure that
companies comply with governance and statutory requirements.
Key compliance requirements:
Appointment of Officers:
The company must appoint directors, a company
secretary, and auditors. Under Act 992, the secretary must meet specific
qualifications, such as being a lawyer, accountant, or corporate
governance expert.
Board Meetings and Resolutions:
The Act mandates regular board meetings to discuss
company operations, approve decisions, and pass resolutions.
Annual General Meetings (AGMs):
Public companies must hold AGMs to present financial
reports, elect directors, and approve dividends.
Filing of Annual Returns:
Companies are required to file annual returns with
the RGD, along with audited financial statements.
Role of Commercial Lawyers:
Advise clients on corporate governance best practices
to avoid legal penalties.
Draft resolutions, meeting notices, and minutes for
board and shareholder meetings.
File annual returns and other statutory documents on
behalf of clients.
3. Share
Capital and Issuance of Shares
The Companies Act, 2019, includes
provisions governing share capital and the issuance of shares.
Key Procedures:
Minimum capital requirements:
Certain industries may require companies to meet
specific minimum capital thresholds.
Issuance of Shares:
New shares can be issued through board resolutions,
subject to shareholder approval in some cases.
Allotment of shares:
Share allotments must be recorded and filed with the
RGD.
Transfer of Shares:
Any transfer of shares must be documented and
registered with the company and the RGD.
Role of Commercial Lawyers:
Draft share issuance agreements and ensure compliance
with the company’s constitution and the Act.
Facilitate share transfers by preparing transfer forms
and updating the company’s register of members.
Advise on capital restructuring, including the
creation of new share classes or rights.
4.
Beneficial Ownership Disclosure
The Act mandates the disclosure of
beneficial ownership to enhance transparency and combat financial crimes.
Key Requirements:
Companies must maintain a register of beneficial
owners, detailing individuals with significant influence or control over the
company.
Disclosures must be made to the RGD as part of
statutory filings.
Role of Commercial Lawyers:
Assist clients in identifying beneficial owners and
documenting their interests.
Ensure accurate and timely filings to avoid penalties
for non-compliance.
Advise on the legal implications of beneficial
ownership structures.
5.
Amendment of Company Documents
Companies may need to amend their
constitution, change their name, or alter share structures as part of their
operations.
Key Procedures:
Amendment of Constitution:
Requires a special resolution passed by shareholders.
The amended constitution must be filed with the RGD.
Change of Company Name:
File an application with the RGD along with a
resolution approving the name change.
Changes in Shareholding or Directors:
Update the company’s register and file the changes
with the RGD.
Role of Commercial Lawyers:
Draft resolutions and amendments to the company’s
constitution or other statutory documents.
Advise on the legal and tax implications of structural
changes.
Handle filings to ensure timely registration of
amendments.
6. Winding
Up and Liquidation
The Companies Act outlines procedures for
voluntary and compulsory winding up of companies.
Key Procedures:
Voluntary Winding Up:
Initiated by the company’s shareholders through a
special resolution.
A liquidator is appointed to manage the process and
settle debts.
Compulsory Winding Up:
Initiated by a court order, typically due to
insolvency or legal violations.
Final Reporting:
The liquidator must submit a report to the RGD upon
completing the winding-up process.
Role of Commercial Lawyers:
Advise on the legal and financial implications of
winding up.
Draft resolutions, court petitions, and notices
related to the liquidation process.
Represent clients in court proceedings for compulsory
winding up.
7. Dispute
Resolution and Enforcement
The Act provides mechanisms for resolving
corporate disputes and enforcing rights.
Key Procedures:
Minority Shareholder Rights:
Shareholders may petition the court for relief in
cases of oppression or mismanagement.
Director Misconduct:
Directors can be held personally liable for breaches
of fiduciary duties or misconduct.
Arbitration and Mediation:
The Act encourages alternative dispute resolution
(ADR) methods to resolve disputes.
Role of Commercial Lawyers:
Represent clients in court or ADR proceedings.
Advise on shareholder agreements and mechanisms to
prevent disputes.
Enforce judgments or arbitration awards against
companies or their directors.
Conclusion
The Companies Act, 2019 (Act 992)
provides a comprehensive framework for managing corporate activities in Ghana.
For commercial lawyers, understanding and navigating the Act’s procedures are
crucial for offering effective legal services. From incorporation and
governance to compliance and dispute resolution, the Act defines the
responsibilities and rights of companies and their stakeholders. By mastering
these procedures, commercial lawyers can safeguard clients’ interests and
contribute to Ghana’s thriving business environment.
blogpay
Total Comments: 0