The best type of business to register depends on several factors. These factors include the nationality of the investor or entrepreneur, the nature of the business or activity, the capital investment, and the size, and structure of the business amongst others. Depending on the above factors, one may register a business as a sole proprietor, Partnership, Company Limited by Shares, Company Limited by Guarantee as well as an External Company.
Ghanaian startups and small businesses may consider registering as a Sole Proprietor Business as the best type of business. It is the simplest form of business registration in Ghana. Registering a Sole Proprietor business is less expensive and less cumbersome. The registration process requires minimal accounting costs, regulatory paperwork, and governance structure.
Unlike Sole Proprietor Business, registering a company limited by shares or an unlimited Liability company comes with a complex corporate governance structure. It involves large record-keeping and regulatory paperwork. A company limited by shares or an Unlimited Liability Company is ideal for companies making high investments. These companies are usually more expensive to operate and complex to manage.
On the other hand, if a foreign company intends to operate a representative office in Ghana, External Company registration is recommended, especially if the company is originally incorporated in another country. The registration of an External Company in Ghana does not confer full incorporation under the laws of Ghana, and therefore such a company is not permitted to carry out complete trading or operations in Ghana as would be the case for a company limited by shares.
For companies that do not intend to engage in a profit-making business but to serve a public, social, or political goal, registering as a company limited by guarantee is preferable. This type of business is ideal for churches, schools, not-for-profit organizations, development organizations etc.
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