How to form a group company.
The use of the word ‘Group’ in the name of a company is restricted by the law and as such, consent must be sought and obtained from the Registrar-General of the Corporate Affairs Commission (CAC) before the word can be used.
Businesses can be structured in the form of a group, in order to achieve an easier management of the various business operations of the companies coming together to form a group. The minimum requirement by the Companies and Allied Matters Act and the Corporate Affairs commission to form a group is three companies that have common shareholders and similar names. The procedure for registration of a group is below;
- The proposed group company shall make payment of a non-refundable application for consent fee.
- Formal application for consent to use the word ‘Group’.
- Evidence of the minimum of three companies with similar names and the same shareholders to form the proposed Group company which will be a distinct entity.
- Evidence of similar ownership or shareholdings of the associate companies.
- Resolution of all companies to be formed into a group indicating consent to the ‘Group’ relationship
- Updated Annual Returns of all companies.
- Statement by the majority of the directors of the proposed Group company; that the share capital shall not be less than the highest share capital amongst the companies to be formed into a group.
- Evidence of compliance with S.553 CAMA where applicable. This applies to banks, insurance firms, deposit, provident or benefit societies.
- When consent is obtained the group company can then be registered following the procedure of normal company registration.
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