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Implementation of Act 992 would boost corporate governance - Registrar-General

Sat, 12 Sep 2020 Source: GNA

Jemima Oware, the Registrar-General, on Friday said one key benefit of the new business law is its inherent strict requirements aimed to improve corporate governance.

She said these strict requirements in the new Companies Act, 2019, (Act 992) would effectively eliminate the trend where some Companies existed only on paper.

The law will promote the visibility of companies and transparency in the corporate circle.

Madame Oware told the Ghana News Agency in an interview in Accra that under Act 992, a person appointed as a Director of a company shall before the appointment, submit to the Company a Statutory Declaration.

The Statutory Declaration requires that the Director in question has not within the preceding five years before the application been charged or convicted of a criminal offence involving fraud or dishonesty.

Again, the Director should not have been charged with or convicted of a criminal offence relating to the promotion, incorporation or management of a company; or has been a Director or Senior Manager of a company that has become insolvent.

“The Act further states that if even the director has done any of the above, he or she must state the date of the insolvency and the particular company,” she added.

She said a Director would have to give consent to be a director and file the consent within 28 days with the Registrar at incorporation.

This is to show that the directors have expressly given permission for their data to be put into the system as Directors of the said company.

Madame Oware explained that in the case of employing a Company Secretary, the Act states that such a Secretary must have obtained a professional qualification or a Tertiary level qualification.

The qualification must enable him or her to have the requisite knowledge and experience to perform the functions of a Company Secretary, or must have held office before the appointment as a Company Secretary trainee or been articled under the supervision of a qualified Company Secretary for at least three years.

“The Secretary must also be a member in good standing of the Institute of Chartered Secretaries and Administrators; or the Institute of Chartered Accountants; or a barrister or Solicitor in good standing.

“He or she must also by virtue of an academic qualification, or as a member of a professional body, appears to the directors as capable of performing the functions as the secretary of the company.

“It is also no longer going to be business as usual where people pick already prepared Auditors Letters of Consent placed at vantage points in the Department and use,” she added.

Registrar General said under Act 992, a company must have an Auditor who is qualified and licensed in accordance with the Chartered Accountants Act, 1963(Act 170); and not disqualified for being an officer of the company or of an associated company.

A novel provision in this Act 992 is that an Auditor shall now hold office for a term of not more than six years and be eligible for re-appointment after a cooling period of not less than six years, the Registrar-General noted.

“These Officers of the Company must swear on their own oath that they are indeed qualified to be Directors, Secretaries or Auditors of the Company.

All officers must also be 18 years and above,” she said.

She noted that another novelty in Act 992 since the age of majority is no more 21 years, but 18 years.

Madame Oware said the current system would accept a mandatory digital address downloaded from the Ghana Post Application for the stated Principal place of business and Registered Place of Business as well as a valid email address otherwise the address would be rejected and the application not processed.

She disclosed that every company in Ghana would now have suffixes attached to their Company names to immediately indicate which kind of entity the company name fell under.

“New companies that would be registered from October would be ascribed with the following suffixes; Private Company Limited by Shares would take Limited Company or LTD; Private Unlimited Liability Company would have PRUC; and Public Limited Company would end with PLC.

“Public Unlimited Liability Company would go with PUC; Companies Limited by Guarantee would have the suffix LBG and Public Company Limited by Guarantee would have PLBG,” she said.

She said the Department would announce a period within which all existing companies would have to comply by passing special resolutions at their various Boards to change their names by attaching these different suffixes to their company names depending on which type of Company the name fell under.

She said a periodic statement would be released at intervals and in time for all clients and customers to be abreast with all the changes of the Companies Act, 2019, Act 992 as and when they would be deployed by the developers of the E-Registrar software.

Source: GNA

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