Dear Mirror Lawyer,
My late mother left my brother and me some inheritance, which we shared equally. I plan to invest my share into trading, but I’m unsure where to begin. What kind of business can I register to operate legally in Ghana?
— Albright James, Sekondi
Dear Albright,
Your decision to invest your inheritance into business is commendable. Under Ghana’s Companies Act, 2019 (Act 992), the type of business you register depends on several factors — including ownership, size, liability, and long-term goals.
Here are the main types of businesses you can register in Ghana:
1. Sole Proprietorship
This is owned and managed by one person. The owner and the business are legally the same entity — meaning you bear full responsibility for all debts and obligations.
Advantages:
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Simple and inexpensive to register.
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Full control over business decisions.
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Flexible management and quick decision-making.
Disadvantages:
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Limited ability to raise capital.
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Personal assets may be used to settle business debts.
Registration is done at the Registrar-General’s Department (RGD). This is often the best option for small traders or startups.
2. Company Limited by Shares
This structure provides limited liability protection — the company’s debts are separate from your personal assets. It’s ideal for those who wish to grow and possibly attract investors.
Requirements:
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At least two directors
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One company secretary
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An auditor
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At least one shareholder (which can be you)
Advantages:
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Separate legal identity from the owner.
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Easier to raise investment capital.
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The company continues to exist even if the owner passes away.
Disadvantages:
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Higher registration and operational costs.
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More regulatory and reporting obligations.
Like the sole proprietorship, it is registered at the Registrar-General’s Department.
3. Partnership
A partnership involves two or more people jointly running a business and sharing profits, losses, and responsibilities. It is regulated by the Partnership Act, 1962 (Act 152).
Advantages:
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Shared financial burden and skills.
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Easier access to capital.
Disadvantages:
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Each partner is personally liable for debts, unless otherwise agreed.
Registration is also done at the Registrar-General’s Department.
4. Company Limited by Guarantee
This structure is suitable for non-profit or charitable organisations. It does not have shareholders but rather members who agree to contribute a fixed amount toward liabilities.
Profits are not distributed but reinvested to further the organisation’s objectives.
Choosing the Right Structure
If you want to trade alone and start small, a sole proprietorship may be the easiest option. However, if you plan to expand, seek investors, or protect your personal assets, a limited liability company (LTD) will be a wiser choice.
Regardless of your decision, ensure you:
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Keep proper accounting records.
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File annual tax returns.
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Comply with all RGD and GRA requirements.
Consulting a lawyer or business registration professional can help you choose the most suitable structure and avoid legal issues later.
Bottom line:
For most small and medium-scale businesses in Ghana, starting as a sole proprietorship or private limited company provides a strong and secure foundation for growth.
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