Private Placement Memorandum (Ghana)

A Private Placement Memorandum in Ghana records the items or particulars it lists for the purpose it serves.

The Securities Industry Act, 2016 (Act 929) is the primary statute governing the offer and sale of securities in Ghana. Act 929 vests the Securities and Exchange Commission (SEC) Ghana with responsibility for regulating and supervising the Ghanaian capital markets, including the Ghana Stock Exchange (GSE), the Ghana Fixed Income Market (GFIM), the Ghana Alternative Exchange (GAX) for smaller companies, and the OTC market for unlisted securities. Section 16 of Act 929 and the SEC Ghana Private Placement Guidelines prescribe the conditions under which an issuer may offer securities by private placement without a full public offer prospectus: the offer must be made to no more than 50 persons, or exclusively to institutional investors and sophisticated investors as defined by SEC Ghana, and the minimum investment per investor must meet the SEC Ghana threshold.

The Companies Act, 2019 (Act 992) governs the corporate structure of the issuer. A company incorporated under Act 992 and registered with the Office of the Registrar of Companies (ORC) must comply with the provisions of Act 992 regarding share issuance, allotment procedures, and the statutory rights of shareholders. Where the issuer is a financial institution — a bank licensed by the Bank of Ghana (BoG), an insurance company regulated by the National Insurance Commission (NIC), or a fund manager regulated by the SEC — additional licensing conditions and capital adequacy requirements imposed by the relevant regulator must be disclosed in the PPM.

A Private Placement Memorandum in Ghana differs from a Prospectus, which is required for a public offer of securities to an unlimited number of investors and must be registered with SEC Ghana before publication; and from a Term Sheet, which is a non-binding summary of the key terms of a proposed investment used in early-stage negotiations. The PPM is the definitive disclosure document that investors and their legal advisers rely upon when conducting due diligence before committing funds, and its accuracy is critical because misstatements or omissions may expose the issuer and its directors to civil liability under Act 929 and criminal liability under the Criminal Offences Act, 1960 (Act 29).

The Ghana Revenue Authority (GRA) administers stamp duty under the Stamp Duty Act, 2005 (Act 689) on instruments evidencing the transfer of securities, and capital gains tax under the Income Tax Act, 2015 (Act 896) on gains arising from the disposal of securities. Investors and issuers should obtain tax advice from a GRA-registered tax practitioner before completing a private placement transaction in Ghana.

A Private Placement Memorandum in Ghana is required in each of the following circumstances where a company seeks to raise capital from investors without a full public offering.

A PPM is needed when a startup, growth-stage, or established company incorporated under the Companies Act, 2019 (Act 992) wishes to raise equity capital from angel investors, venture capital funds, or private equity funds operating in Ghana, by issuing new shares or convertible instruments to a limited number of sophisticated investors under the SEC Ghana private placement regime.

A PPM is required when a real estate development company seeks to raise debt or equity financing from institutional investors — including pension funds regulated by the National Pensions Regulatory Authority (NPRA), insurance companies regulated by the NIC, and collective investment schemes regulated by SEC Ghana — for a specific property development project in Ghana.

A PPM is needed when a company listed on the Ghana Stock Exchange (GSE) or the Ghana Alternative Exchange (GAX) intends to conduct a rights issue or a private placement of additional shares to institutional investors to fund expansion, acquisitions, or working capital requirements.

A PPM is required when a fund manager regulated by SEC Ghana launches a new collective investment scheme — such as a unit trust, mutual fund, or real estate investment trust (REIT) — and seeks to attract anchor investors before the public offer phase.

Parties should prepare the PPM before making any offer of securities to investors in Ghana, to comply with the SEC Ghana private placement rules and to protect the issuer from liability for inadequate disclosure. Forms-legal.com provides this template as a starting point for Ghana-compliant capital raising documentation.

Parties in Ghana should prepare a Private Placement Memorandum (Ghana) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under the Companies Act 2019 (Act 992), the Registrar General's Department (RGD) maintains the register of Ghanaian companies. Section 7 of the Companies Act 2019 governs company incorporation. The Ghana Revenue Authority (GRA) administers corporate tax under the Income Tax Act 2015 (Act 896). The Commercial Division of the High Court in Accra adjudicates business disputes. The Ghana Investment Promotion Centre (GIPC) regulates foreign investment under the GIPC Act 2013 (Act 865). Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.

A valid Private Placement Memorandum in Ghana under the Securities Industry Act, 2016 (Act 929) and SEC Ghana Guidelines must contain the following essential elements.

Cover Page and Disclaimer: The issuer's name, ORC company registration number, the date of the PPM, the type and number of securities being offered, the total offer amount in Ghana Cedis (GHS), and a prominent disclaimer that the PPM has not been registered as a prospectus with SEC Ghana and is restricted to qualified investors.

Issuer Description and Corporate Structure: A description of the issuer's business, history, corporate structure, subsidiaries, and principal activities, together with the company's certificate of incorporation and any sector-specific licences (e.g., Bank of Ghana licence, SEC Ghana fund manager licence).

Management and Governance: Profiles of the board of directors, executive management, and key advisers, including their qualifications, relevant experience, and any directorships in other companies registered with the ORC under Act 992. Any conflicts of interest must be disclosed.

Financial Information: Audited financial statements for the most recent two to three financial years, prepared in accordance with International Financial Reporting Standards (IFRS) as required by the Institute of Chartered Accountants Ghana (ICAG), and reviewed by an auditor licensed by the Institute of Chartered Accountants Ghana.

Terms of the Offering: The type of securities (ordinary shares, preference shares, bonds, or convertible notes), the offer price or valuation basis, the minimum subscription amount, the total number of securities on offer, the use of proceeds, and the timeline for subscription and allotment.

Risk Factors: A thorough disclosure of material risks facing the issuer and the investment, including business risks, regulatory risks, currency risks (fluctuations in the Ghana Cedi against the US Dollar and other currencies), political and economic risks specific to Ghana, and liquidity risks for an unlisted security.

SEC Ghana Compliance: Confirmation that the offering complies with the SEC Ghana Private Placement Guidelines, including the investor qualification criteria (institutional investor or sophisticated investor as defined by SEC Ghana), the maximum number of offerees permitted, and the required filing with SEC Ghana.

Subscription Process: Instructions for investors to complete a subscription agreement, the due diligence documents required from investors (including Anti-Money Laundering (AML) and Know Your Customer (KYC) documents under the Anti-Money Laundering Act, 2008 (Act 749)), and the bank account at a Bank of Ghana-licensed institution into which subscription funds are to be paid. Forms-legal.com provides this template as a starting point for Ghana-compliant investment memorandum documentation.

Additional compliance elements for a Private Placement Memorandum (Ghana) used in Ghana include: Under the Companies Act 2019 (Act 992), the Registrar General's Department (RGD) maintains the register of Ghanaian companies. Section 7 of the Companies Act 2019 governs company incorporation. The Ghana Revenue Authority (GRA) administers corporate tax under the Income Tax Act 2015 (Act 896). The Commercial Division of the High Court in Accra adjudicates business disputes. The Ghana Investment Promotion Centre (GIPC) regulates foreign investment under the GIPC Act 2013 (Act 865). Forms-legal.com provides this template as a starting point for Ghana-compliant documentation.