1E9Ct5D

PROPOSED LEGISLATIVE REFORMSReal Estate Investment TrustThe Securities and Exchange Commission (SEC) is embarking on a plan to pass a regulatory framework to lead tothe establishment of Real Estate Investment Trusts by 2013. The proposed reforms are intended to ease the taxburden and funding constraints of the real estate sector which is a very booming sector in Ghana and the margins areseverally known to be high. A framework for REIT is expected to make the sector even more attractiveEstablishment of EnterprisesIn GeneralAn investor who is desirous of establishing a for-profit enterprise in Ghana has three options: to register a soleproprietorship, which is an individual operating under the name and style of a registered business name; to register apartnership with a minimum of two to a maximum of 20 individuals carrying on business jointly for the purpose ofmaking profits; or to register an external company (i.e., the Ghana branch of a company incorporated outside Ghana)or incorporate a public or private Ghanaian company, limited or unlimited by shares. It is important to note that soleproprietorships and partnerships are restricted to Ghanaians.Joint Stock CompanyA company registered with shares must meet the requisite eligibility and capitalization requirements prescribedunder the Companies Act and the Ghana Investment Promotion Center Act (GIPC Act), respectively. Capitalizationrequirements depend on the nationality of the shareholders and the nature of business of the company.When the enterprise is owned jointly with a Ghanaian, the minimum capitalization required is US $10,000. When itis wholly foreign owned, the minimum capitalization requirement is US $50,000. A company that is engaged inretailing or trading must have a minimum capitalization of US $300,000. There are specified capitalizationprescriptions for companies operating in some regulated sectors such as banking, finance, and capital markets.Limited-Liability CompanyA limited liability company is a company having the liability of its members limited to the amount, if any, unpaid onthe shares held by them. Shares are of no par value, and the value of the shares is determinable at the time ofpurchase or sale.Under the Companies Act, a limited-liability company is characterized as private if the company’s regulationsrestrict the company’s right to transfer its shares, if any; limit the total number of its members and debenture holdersto 50; and prohibit the company from making any invitation to the public to acquire its shares or debentures or todeposit money for fixed periods, whether bearing interest or not. Any other company that can invite the public toacquire shares or debentures as regulated by the Securities and Exchange Commission (SEC) is a public company.