How to form a group company.

How to form a group company.

October 19, 2018

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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The information in this blog post (“post”) is provided for general informational purposes only, no information contained in this post should be construed as legal advice, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through this post without seeking the appropriate legal or professional advice from the particular facts and circumstances at issue from a lawyer. This post is protected by intellectual property law and regulations. It may however be shared using appropriate sharing tools provided that our authorship is always acknowledged and this Disclaimer Notice attached.

 

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    • A business name is a sole proprietorship, usually owned and managed by one individual only. Legally, the sole proprietor and his business are one. It simply means an individual trading with an alias. The sole proprietor is personally liable for all business related obligations.

    • A limited liability company on the other hand is a separate business entity from the individuals that hold its shares and act as directors. Legally, it’s a separate business entity and a person on its own who can transact business, own property separate from its owners and can sue or be sued. 

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  • What’s the difference between a business name and an LLC?
    • A business name is a sole proprietorship, usually owned and managed by one individual only. Legally, the sole proprietor and his business are one. It simply means an individual trading with an alias. The sole proprietor is personally liable for all business related obligations.

    • A limited liability company on the other hand is a separate business entity from the individuals that hold its shares and act as directors. Legally, it’s a separate business entity and a person on its own who can transact business, own property separate from its owners and can sue or be sued. 

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