How private enterprises are supported by Ghana's legal system

A series of laws were passed in recent years aimed at supporting the development of Ghana’s private sector. These changes addressed long-standing impediments to investment and created a supportive regulatory environment that facilitated the growth of entrepreneurships; micro-, small and medium-sized enterprises (MSMEs) and large corporations.

Insolvency & Restructuring

The Corporate Insolvency and Restructuring Act 2020 gives companies in distress the option to restructure, or enter into receivership or administration. The legislation increased creditor involvement, as well as introduced post-commencement liquidation and cross-border insolvency – a measure aimed at promoting cooperation with foreign courts and practitioners on insolvency matters. The legislation establishes a formula to determine the solvency of a company, and places personal and criminal liability on directors and officers who knowingly trade while the company is insolvent. It also places such liability on directors or officers who ought to have known that the company was trading while insolvent.

Companies Act 2019

The Corporate Insolvency and Restructuring Act 2020 regulates private insolvency practitioners and the insolvency division at the Registrar of Companies established by the Companies Act 2019. The 2019 law consolidates regulations related to companies from registration to winding up. It prohibits companies from entering into major transactions unless approved by special resolution. The Companies Act 2019 includes a buy-out remedy that protects dissenting minority shareholders against oppression. If a shareholder is outvoted on a matter related to the amendment of the company’s constitution; the dispensation of the registered objects; business activities; the approval of a major transaction; the variation of class rights; or an arrangement, merger or both, that shareholder may require the company to buy its shares. The shareholder must have disapproved the transaction and voted wholly against the resolution to qualify.

Borrowing & Lending

The Borrowers and Lenders Act 2020 enables lenders to dispose of a security interest in a credit agreement without going to court. It re-establishes the Collateral Registry, provides a legal framework for registration and enforcement of security interests, institutes order of priority of security interests and provides for credit agreements that regulate transactions. Upon creation of the collateral or security interest, the lender must register the security interest with the Collateral Registry within 28 days after creation. Collateral or security interests at the Collateral Registry takes priority over any other collateral created under any other law or process. If the lender finds it impractical to take possession of the collateral, the lender may apply to court for police protection to undertake the exercise. Any proceeds realised from the sale can be applied to the cost incurred in disposing of the collateral, reasonable legal fees incurred and debt outstanding to the borrower.


The Ghana Enterprises Agency Act 2020 establishes the Ghana Enterprise Agency to regulate, promote and develop MSMEs. The agency facilitates technology transfer; training; and access to financial and non-financial resources, and professional services to MSMEs. The legislation protects all previous contracts that subsisted between an individual and Ghanaian Enterprises Development Commission or the National Board for Small Scale Industries.

Continental Trade

The African Continental Free Trade Area (AfCFTA) is also expected to facilitate the development of Ghana’s private sector. The AfCFTA prioritises sectors including business and financial services, communications, transport and tourism. The AfCFTA will cut tariffs on 90% of goods traded within the continent, and tariff phase downs shall be implemented in equal instalments over a period of five years.

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The Report: Ghana 2022

Legal Framework chapter from The Report: Ghana 2022

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