A Non-governmental Organization (NGO) is a group which is not under the management of the government and is not in business with the goal of making profit, but rather address specific needs in society.
NGOs are often funded by the government of a country while in some cases, it could be funded by private entities or groups, as well as foundations.
Difference Between Non-Governmental Organization (NGO) And Non-Profit Organization
A non-profit organization is established for the purpose of achieving a goal in the society and is not profit oriented. This definition is broad and it includes an NGO.
But the notable difference between NGOs and NPOs is that an NGO is a legal entity, a non-governmental organization that is mostly funded by the government but excludes the government from its operations.
In the case of Non-profit organizations, extra funds from their various activities are used solely for the purpose of the organization, unlike NGOs where extra funds could go to shareholders and owners of the organization.
NPOs could be charity organizations, service organizations or even NGOs.
How to Register and Start An NGO in Ghana
From the steps below, one can follow and successfully register an NGO in Ghana.
Below are requirements for NGO registration in Ghana.
- The name of the organization
- The names of the directors
- An official fee of Two hundred and Seventy Ghana Cedis. (GH₵ 270)
- Particulars of Directors and Secretary (including names, nationality, age, residential address, and designation).
- Name and address of Auditors
- The auditor or auditing firm must be credible.
- Address of registered office, principal place of business
The total statutory cost for registering an external company in Ghana is 270 Cedis. This fee is payable directly to the Registrar General’s Department.
A set of prescribed regulatory documents and a set of form 3s from the Registrar General’s Department at GH₵9.50 or download all business registration forms online, at https://rgd.gov.gh/forms.html.
To register a company limited by guarantee, one needs to take these steps;
STEP 1 – Company Name Search
A business or company name is vital to the success of the business. In that regard, it is advisable to search for the availability of your business name before registering it.
In choosing the name for a Not-for-profit, ensure that;
- Meaningful– Does the name support the positioning and reflect the essence of the organization?
- Relevant– Is the name relevant to the key audiences you are trying to reach. (target market, donors, volunteers)
- Distinctive- Does the name stand out from the names of other organizations in your community?
Names that sound or look familiar to already registered names won’t be considered for registeration.
STEP 2- Apply for a Tax Payer Identification Number (TIN)
All secretaries are mandated to secure a TIN in order to successfully process registration. Applicants would be required to provide the TIN of the board members and secretary on the form provided.
In case the board members and secretary do not have it, there is a taxpayer identification number form applicants must complete in order to secure a tin.
- Name of applicant
- Photo ID details
- Mother’s maiden name
- Residential and postal
- Contact of applicant
STEP 3 – Complete Company Limited by Guarantee Form 3
- Company name
- Principal or business activity of the company
- Business address information
- Principal place of business ( physical address of business)
- Address of other places of business (if applicable)
- Postal address of the company
- Particulars of the Executive Council Members/Directors/Secretary (this may include; nationality, date of birth, occupation, residential address)
- Particulars of the auditor of the company
According to the Companies Act 179, all companies are required to have at least two initial directors and a secretary during the company registration process. At least one of the company directors or secretary must be resident in Ghana.
STEP 4- Company Limited by Guarantee Regulations Form
- Nature of business
- Name & TIN of members of the Executive Council
- Address description of the subscriber. This includes;
- Date of birth
- Business occupation
- Postal address of the applicant
- Signature of applicant
STEP 5 – Submission of Forms
After filling the forms, an applicant should submit the forms to the office of the Registrar General Department with an official fee (in cash) of GH₵270. After a successful registration, the applicant would be given a Certificate of Incorporation, Certificate of Commencement, Form 3, and the Company’s Regulations.
Licensing Requirements for NGOs from the Department of Social Welfare
After registering the company with Registrar General’s Department, all NGOs are mandated to register with social welfare before the commencement of business. Below are the procedures for registration with social welfare.
Apply for NGO status at the department of social welfare which is the regulator of NGO in Ghana, by submitting five copies each of the following documents to the Accra Metropolitan Assembly (A.M.A.) within the District where the NGO is located
- Certificates of incorporation and commencement of business.
- Application letter on the organization’s official letterhead
- The organization’s constitution
- An NGO profile form
- Memorandum of understanding between the NGO and the Government
- Articles of incorporation from the country of origin
- A social investigation report
- A recommended letter from the district, municipal or metropolitan assembly responsible for the area where your NGO is to be located.
- Brochure or publication about your organization.
- The district office (A.M.A) after inspection and evaluation write a report to the national or regional office by submitting 3 copies of an endorsement letter of the department of social welfare.
Taxes for Companies Limited by Guarantees in Ghana
Companies limited by guarantee including NGOs are exempted from paying corporate taxes. Corporate tax is the tax imposed on the net income of the company, in other words, it is a levy placed on the profit of a firm to raise taxes.
NGOs are exempted from paying Value Added Tax (VAT). This is because Companies limited by guarantee do not have tradable goods and services that attract VAT.
VAT is charged on the supply of goods and services in Ghana, imported goods and the supply of imported services at a rate of 15%. In a case where the NGO starts to engage in buying and selling, the company is obliged to comply with the law and pay tax as the law demands.
However, employees of all companies limited by guarantee are mandated to pay income taxes on thier earnings. The Pay-As-You-Earn (PAYE) tax is deducted from the employee’s personal income.
It is also the responsibility of the employer to file monthly tax returns on behalf of its employee.
In order not to be caught up with the law, Investors, businessmen and all charity organization who wish to set up a business or company in Ghana must endeavor to comply with all the laws of Ghana.
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