'Real' owners of businesses to be exposed - Registrar General

The Companies Act 2018 has been amended to track Ghana’s extensive beneficiary ownership regime effective from next year.

What this entails is that owners and shareholders of companies who deliberately hide or misrepresent information on beneficiary ownership – which is supposed to show the real people behind the business enterprise – 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 requirement has been inserted into the Companies Act 2018 which is before the Committee on Constitutional, Legal and Parliamentary Affairs of Parliament and is expected to be passed this year.

This is part of the newest reforms currently being implemented by the Registrar General’s Department aimed at promoting integrity and transparency in Ghana’s private sector.

Some analysts have said that this process is a step towards cleaning up the business community to ensure that the identities of the real owners of businesses are not hidden from regulators, facilitators and the general public.

To implement this requirement, the RGD has started the process of updating its electronic system to capture details of beneficiary ownership before the new initiative fully comes on stream next year.

To ensure full compliance to the requirement without any backlash from the business community, the Department will from next month begin sensitizing business owners and shareholders about the need to have registers in their various companies to capture beneficiary ownership data before feeding the RGD with the data.

After the sensitization, the Department would collect data on beneficiary ownership of all companies within the next six months to enable effective implementation of the process.

“This will bring transparency and enable us to know the real owners behind the establishment of companies. Sometimes things could be shrouded in secrecy; there could be money laundering, tax evasion and we wouldn’t know those operating behind the business”, the Registrar General, Mrs. Jemima Oware told the Goldstreet Business during the second regional multi-stakeholder dialogue on Business Integrity in Accra, organized by the Ghana Integrity Initiative (GII) in collaboration with the Private Enterprise Federation (PEF).

Currently, seeking basic information on business set ups are free. However, if a person needs additional details such as who is behind a company, their shareholders and a number of other things, such person must pay Gh¢25 to the RGD before having access.

While business analysts see the new initiative as good one, they doubt its efficacy, pointing out that if an investor or financier wishes to remain hidden, that should not be too difficult to achieve.

For instance, if an investor claims he has financed a business as a gift for his wife, who is consequently the shareholder, rather than the financier himself, that claim cannot be refuted by business regulators. Thus while the new initiative may have some success in uncovering investors who overtly seek to remain hidden, it would still be possible to hide in plain sight by admitting to the investment but insisting it is a gift to someone else.