(a) In advising Mr. Nkumsah on amending the company’s constitution and potential legal difficulties, the key legal principles under the Companies Act, 2019 (Act 992) are the doctrine of ultra vires (actions beyond the company’s powers) and the procedures for altering the company’s constitution.

• Amendment Process: Under Section 21 of Act 992, the company can amend its constitution (including objects clause) by special resolution passed by at least 75% of shareholders at a general meeting. Mr. Nkumsah, as majority shareholder (60%), would need to convene a meeting, propose the amendment to include importing baby pampers, and secure the required votes (he may need additional support if other shareholders object). Post-resolution, file the amended constitution with the Registrar of Companies within 28 days (Section 22), paying applicable fees. In practice, at banks like Stanbic Bank Ghana, we verify such amendments via searches at the Registrar General’s Department before advancing loans, ensuring BoG compliance on lending risks.
• Legal Difficulties of Ultra Vires Actions: If the company proceeds without amendment, the transaction is ultra vires and unenforceable under Section 139 of Act 992, meaning the loan could be void, and the bank might not recover funds (though third parties like the bank are protected if acting in good faith under Section 140). Shareholders could sue directors for breach of fiduciary duty (Section 190), seeking injunctions or damages. Creditors (e.g., debenture holders) might challenge the use of assets under the floating charge if it prejudices their security. Historically, in Ghanaian cases like those during the 2017 banking cleanup, ultra vires lending led to non-performing loans; thus, advise obtaining board resolution confirming the amendment and aligning with BoG’s Credit Risk Management Guidelines.

This ensures the facility is viable, reducing risk of default due to legal invalidity.

[10 Marks: 5 marks for amendment process (steps, references to Act 992), 5 marks for ultra vires difficulties (implications, protections, examples).]

(b) The legal principles here involve the separate legal personality of companies (Salomon v Salomon [1897] AC 22, affirmed in Ghana under Section 1 of Act 992), negotiable instruments under the Bills of Exchange Act, 1961 (Act 55), and bank policies on cheque collection to mitigate conversion risks.

• Separate Legal Personality: Jamsah Ltd. is a distinct entity from its shareholders, so a cheque payable to the company belongs to it, not Mr. Nkumsah personally, despite his 50% shareholding. Crediting it to his personal account could constitute conversion (wrongful dealing with property), exposing the bank to liability under common law torts or Section 81 of Act 55 if collected negligently. His “internal arrangement” argument fails as it lacks formal company authorization (e.g., board resolution), violating corporate governance under Act 992 Section 190 (directors’ duties).
• Bank Policy and Statutory Protections: Bank policy aligns with BoG’s AML/CFT directives and Act 55 Section 81, requiring good faith and no negligence in collection. As a director, Mr. Nkumsah cannot endorse on behalf of the company without mandate; advise him to deposit into Jamsah Ltd.’s account or provide a company resolution authorizing the transfer. In practice, at Ecobank Ghana, such policies prevent fraud, as seen in cases where directors misappropriated company funds leading to BoG investigations.
• Resolution: Politely reiterate policy, suggest alternatives like opening a company account or obtaining endorsement from both shareholders, and document the interaction for compliance. This protects the bank from claims by the other shareholder or regulators.

[10 Marks: 4 marks for separate personality and conversion risks, 3 marks for policy/statutory references, 3 marks for practical resolution advice with examples.]