The Law Behind the Hustle: Ghana’s New MSME Classifications

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Every thriving economy has its silent architects. The businesses that may never make headlines but keep entire families afloat, create jobs and build communities.

In Ghana, we’ve long called them “small businesses,” but that name has always felt incomplete. Because let’s be honest, what’s “small” about carrying the weight of the economy on your back?

Ghana has introduced a new Classification of Micro, Small and Medium Enterprises (MSME) Regulations, 2023 (L.I. 2470) and it’s a game changer. So, how does it work?

The regulation breaks businesses down into four categories-Micro, Small, Medium and Large, based on three simple criteria:

1.     How many permanent employees you have

2.     How much money you make in a year (turnover)

3.     The value of your fixed assets

So, if you have 1 to 5 employees, and your business brings in an amount less or equal to  GHS 150,000, you’re officially a Micro Enterprise. Small in size, but essential to the nation’s growth.

If you’ve grown and now have 6 to 30 employees, with income or assets more than  GHS 150,00 but less than or equal to GHS 6 million, then you’re running a Small Enterprise.

For businesses with 31 to 100 employees and figures between GHS 6 million and GHS 18 million or equal to same, welcome to the Medium Enterprise class.

Once you cross these limits, you move into Large Enterprise territory. It means your growth has stretched beyond the MSME bracket.

These classifications  do not exist to label your business only,  it exists to empower your business. By knowing exactly where your business fits, you can now access the right kind of support. Whether it’s funding, mentorship, technology, policy interventions or development opportunities, everything becomes clearer and more targeted.

 

Key Terms You Should Understand (Without the Legal Jargon):

i)               Fixed Asset

What the law says: A long-term asset including equipment, land or an industrial plant used in the operation of an enterprise or for producing goods or services.

What it really means: These are the things you buy once and use over a long time to run your business. Think sewing machines, ovens, delivery vans, printers  or even land for your farm or factory. You don’t sell them often, they help you do the actual work.

ii)             Permanent Employee

What the law says: A person who works for an employer, is directly paid by that employer and has no predetermined end date to the employment.

What it really means: This is someone you’ve hired to work with you long-term. They’re not a temp, not a casual worker, not someone you pay “now and then.” They are officially on your team and paid directly by you every week or month.

iii)           Turnover

What the law says: The value of sales transacted in a given year.

What it really means: It is the total money your business makes from selling products or services in one year before you subtract any costs, expenses or taxes. Just imagine adding up every sale you made from January to December, that’s your turnover.

In this series, I’ll keep breaking it down. I’m here to make sure you don’t just run a business, but also own the knowledge behind it.

www.tweneboahkoduahlegal.com

https://linktr.ee/lawyerTKay 

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