It is important to state here that Registration of Non-Profit Organizations in Ghana or Non-Governmental Organization in Ghana (NGO) is used interchangeably with the term company limited by guarantee in Ghana.
REGISTRATION OF NON-PROFIT ORGANIZATIONS IN GHANA
In essence, applicants that intend to register and operate a business structure in form of non-profit organizations, clubs, co-operatives, social enterprises, community projects, membership organizations and charities to serve social, charitable, community-based or other non-commercial causes are required to register as a company limited by guarantee.
COMPANY LIMITED BY GUARANTEE IN GHANA
This is a company having the liability of its members limited to amounts that they respectively undertake or guarantee to contribute to the assets of the company in case of liquidation. Not-for-profit organizations or Guarantee companies typically retain any surplus income for re-investment or use it to promote the non-profit objectives of the business rather than distribute profits to members.
A guarantee company is not registered with shares and is not permitted to create any shares, such that it is only suitable if no initial funds are required or those funds are obtained from other sources, e.g., endowments and donations. The company is also not permitted to engage in trading, or pay dividends or distribute or return any assets to members.
FEATURES OF A COMPANY LIMITED BY GUARANTEE
- The liabilities of the members are limited by guarantee.
- The income and property of the company shall be applied solely towards the promotion of its objects.
- No portion of the income and property shall be paid or transferred in any manner to the members, except payments is permitted by the regulations, such as the payment of reasonable and proper remuneration to officers in return for services actually rendered, out-of pocket expenses, interest not exceeding 6% on money lent to the company, and reasonable and proper rent for premises let to the company.
- Each member will contribute to the assets of the company in the event of its being wound up, to cater for the payment of the company’s debts and obligations, costs of liquidation and other amounts required, up to whatever limit is prescribed by the Regulations. In respect of members, this liability extinguishes only where a person has ceased to be a member for more than a year.
- Membership of a guarantee company may end only by death, valid retirement or any other manner prescribed in the Regulations.
- Upon winding up, the residue of the property shall not be distributed to members, but shall be either given to some other guarantee company with similar objects or applied to some charitable purpose. Members before the dissolution of the company shall determine the beneficiary.
REQUIREMENTS FOR REGISTRATION OF NON PROFIT ORGANIZATIONS IN GHANA
Below are the relevant information required to register a company limited by guarantee:
- The name of the organization (at least 2 alternative names for reservation);
- Details of the Executive Council Members, Subscribers and Secretary (name, address, phone number, email address, date of birth);
- Tax Identification Number for Executive council members, Subscribers, Secretary;
- Passport biodata pages of Executive council members, Subscribers and Secretary (For TIN, where applicable);
- Proposed address of company (digital address, building name, street name, House Number);
- Details of auditors (individual or corporate entity)
Below is a step by step guide to registering a company limited by guarantee with the Registrar General’s Department (RDG), Ghana:
Step 1: Name Search
The Applicant is required to carry out a name search at the RGD to confirm the availability of its desired name. The RGD may reject names which in its opinion are too similar to existing names, misleading, offensive, and undesirable or violate existing trademarks. It is advisable to submit alternate company names.
Step 2: Obtain Tax Identification Number
Applicants would be required to provide the TIN of the board members and secretary in order to successfully process the registration. Where the required persons do not have their TIN, it is mandatory that they obtain it from the Ghana Revenue Authority having provided the following details:
- Details of applicant (name, address, phone number, email address, and maiden name);
- Photo ID details; and
- Contact of applicant
Step 3: Complete Application form
Applicants may purchase a set of prescribed regulatory documents and a set of form 3s from the Registrar General’s Department at GH₵9.50 or download all business registration forms online.
The following information are required to be filled in the application form:
- Approved company name;
- Objectives or business activity of the company;
- Business address/ principal place of business;
- Postal address of the company;
- Details of the Executive Council Members/Directors/Secretary (this may include; nationality, date of birth, occupation, residential address)
- Particulars of the auditor of the company.
All companies are required to have at least two initial directors and a secretary during the company registration process, and at least one of the company directors or secretary must be resident in Ghana.
Step 4: Regulation form
In addition to the general application form, applicants are required to fill a regulation form with relevant information. The regulation form must be witnessed by a relevant authority.
Step 5: Submission of application
After completing the forms, an applicant should submit the forms to the office of the Registrar General Department with an official fee (in cash) of GH₵270. Upon successful registration, the applicant would be issued a Certificate of Incorporation, Certificate of Commencement, Form 3, and the Company’s Regulations.
ADDITIONAL LICENSING REQUIREMENT FOR A NON PROFIT ORGANIZATIONS IN GHANA
After registration with the RGD, all NGOs are mandated to apply and register for NGO status at the department of social welfare which is the regulator of NGO in Ghana, by submitting five copies each of the following documents to the Accra Metropolitan Assembly (A.M.A.) within the District where the NGO is located.
- Certificates of incorporation and commencement of business.
- Application letter on the organization’s official letterhead.
- The organization’s constitution.
- An NGO profile form.
- Memorandum of understanding between the NGO and the Government.
- Articles of incorporation from the country of origin.
- A social investigation report.
- A recommended letter from the district, municipal or metropolitan assembly responsible for the area where your NGO is to be located.
- Brochure or publication about your organization.
- The district office (A.M.A) after inspection and evaluation write a report to the national or regional office by submitting 3 copies of an endorsement letter of the department of social welfare.
Cost of Registration with the Department of Social Welfare
The official cost implication for registering a company limited by guarantee with the Department of Social Welfare is ¢1,200 for local NGOs and $1,200 for foreign NGOs who have their branches registered in Ghana.