The Registrar-General’s Department (RGD) is in the process of deleting more than 600,000 companies from its database as these listed companies, according the RGD have been dormant for some time and as such have failed to renew their commitment to operate as business entities.
This will mean that when this assignment is carried out, the number of properly established companies that will be left might be just a little over 400,000.
This falls in line with the Department’s mandate in ensuring that business entities operating in the country do so in line with the laid down rules and measures establishing their existence.
It is important to note that this impending action by the RGD comes at a time majority of factors inhibiting the processes in business registration have been dealt with making it now easier than ever before in Ghana for people to register their businesses.
In fact, following the merger of all four starting-a-business application forms namely: Tax Identification Numbers (TINs); Social Security and National Insurance Trust (SSNIT); Business Operating Permit application; and Business Registration forms, this initiative has enabled business promoters to fast track the entire business registration process.
This initiative is contributing immensely in formalizing the economy as the RGD leverages on technology and digitization to improve on administrative systems by automating some processes to ease the cost and time needed to register businesses in Ghana.
Registering businesses has lots of importance. First and foremost, a company’s ability to attract investors – both domestic and expatriate – and raise capital for the company will be easier when it is seen as a registered entity. Certainly, investors are far more likely to invest in a registered company rather than an unregistered business that has no formal structures in place.
If a business is registered, owners have the capacity to raise capital through equity financing, which involves selling shares to prospective shareholders, angel investors or venture capitalists. Equity financing is advantageous in that the money raised does not have to be repaid and it incurs no interest. The company will only have to pay dividends to the shareholders where profit is made. Raising such equity capital is essential for the growth and expansion of the business.
Again, registering a business entity enhances its reputation and prestige. Incorporating one’s business suggests that the business has permanence and is committed to effective and responsible management at all levels which in turns gives third parties including customers, employees and contractors a sense of confidence. For instance, having Ltd or Plc among other suffixes as part of company’s name can be expected to increase the business chances in any contract bidding process as it will be perceived as being more stable than an unregistered business.
Goldstreet Business believes that it will be unwise for people operating such businesses earmarked for deletion to still wait till they are taken off from the companies register before rushing to the RGD to begin the whole registration process again.
We think that the private sector – recognized as the engine of growth – should rather be seen as leading the way in the formalization of the business ecosystem.
Source: goldstreetbusiness
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