How to register a sole proprietorship

Sole proprietorship is a business owned, managed, and controlled by one individual or person, who receives all profits, and also bears responsibilities for all debts and liabilities.Insurance

This business structure is the simplest and most popular form of business organization in Ghana. There are many sole proprietorships which operates within market-places, roadside shops, mobile money transactions and other forms of petty trade.

In this article, the author discusses the step-by-step procedure to register a sole proprietorship in Ghana. The article also outlines the basic requirements for registering a sole proprietorship under the Registration of Business Names Act 1962 (Act 151).

Who Can Register A Sole Proprietorship?

Both individuals and corporate entities can register a sole proprietorship in Ghana. For individuals, the Applicant must be eighteen (18) years or above. For an individual to register as a sole proprietor, he or she must have a place of business in Ghana and carries on his or her business in a name other than his surname.InsuranceEvents in Ghana

A corporate entity carrying on business in the Republic can also register a sole proprietorship under a business name which does not consist of its registered corporate name. However, registration is not necessary where the business name merely indicates that the business is carried on in succession to a former owner of the business, or where the business is carried on by a receiver or manager appointed by a court of competent jurisdiction.

What Are the Basic Requirements?

To register a sole proprietorship, the Applicant must be eighteen (18) years or above. The Applicant must have certain particulars or certain information about the business he or she wants to do. The particulars include, the business name, the general nature of the business, the principal place of business, and any other places where the business will operate.Insurance

The Applicant must also provide his personal details such as present name and surname, nationality and nationality of origin (if any), usual residence and other business occupation, whether the individual is under twenty-one (21) years of age, among others. Also, the Applicant must provide his National Identification Card for the verification of his personal details provided in the registration form. The above basic requirements must be provided to the Registrar in the “Prescribed Form A.

Submission of Application Form to the Registrar

After the preparation of the statements, the next step is the submission of the registration statement. The individual must furnish or provide the Registrar at the registration office within fourteen (14) days after the commencement of the business in respect of which registration is required, a written statement of the particulars required.Insurance

The Applicant must also complete the prescribed registration Form A in writing and must ensure all that all the details of the individual provided in the form are accurate and truthful. This is because if the Registrar finds anything misleading or inaccurate in the Form A, he or she may refuse to register the business and such persons will be liable to pay administrative penalties.

The individual must sign the Statement Form or Form A before submitting it to the Registrar for the registration of the individual’s business. One is required to pay a fee at the Registrar’s office for the registration of the business to be applicable at the time of submission of the form.

Registration and Record of Keeping Insurance

The Registrar is mandated to review the registration statement or Form A to ensure the business name the Applicant chose isn’t misleading, unlawful or already registered by another party. This means that the name the Applicant wants to use for his or her business must reflect the type of business Applicant does or wants to do. For example, an Applicant cannot use a business name “K.K. BOOKSHOP” and be selling glass wares. The name must always align with the services the Applicant wants to provide as a business owner.

Issue of Certificate of Registration

On approval of registration of the business name, the Registrar will issue a certificate of registration of business name, which serves as an official proof of registration as sole proprietor. If a sole proprietor has been denied registration, he or she may within twenty-one (21) days of the receipt of notification regarding the refusal of the registration by the Registrar, appeal the decision of the Registrar to the High Court.InsuranceInsurance

Post-Registration Responsibilities

After becoming a registered sole proprietor, any changes in the registered form must be notified in writing to the Registrar. This means, as time goes on and the sole proprietor undergoes changes such as change in principal place, change of business name or personal details (such as usual residence, name or surname etc.), the sole proprietor must submit the changes to the Registrar to update the records.Insurance

Renewal of Registration

The Proprietor must renew the registration of his business every year. The Registrar may remove the Business name from the register of business if the proprietor fails to renew the registration of his business. Failure to renew the registration of the business, may also attract administrative penalties.

Conclusion

Sole proprietorship offers a straightforward and efficient way to start and run a business, making it an attractive option for entrepreneurs and small business owners. The author hopes that this article provides the basic requirements and procedure to register a sole proprietorship in Ghana.

The author is a legal intern with The Law Office of Elisa Kumadey and a current level three (3) law student at Central University’s Faculty of Law. Yasmina is passionate about researching on corporate and commercial law as well as legal issues of corporate compliance.