PROFESSIONAL PROGRAM – Page 39

BCL – L1 – Q86 – Company directors and other officers

Can StarFish Ltd deny Maxwell Asante as a director after holding him out as one?

Question

StarFish Company Ltd, traders in frozen fish, entered into an oral agreement for the supply and sale on credit basis, of all its frozen fish to Asamoah Company Ltd. The affairs and the business of StarFish Company Ltd were undertaken by its Managing Director and one Maxwell Asante. Maxwell Asante was never appointed by the Company as a director, but he transacted business on behalf of StarFish Company Ltd with Asamoah Company Ltd, as if he were a director and the Chief Executive Officer of the Company. Maxwell Asante acted on behalf of the Company by signing the applications for the Company to be registered as an importer, apart from financially assisting the Company to start business. The name of Maxwell Asante also appeared on the Company’s letterhead as one of its directors.

StarFish Company Ltd allowed Maxwell Asante to share in its profits by allocating to him fifty percent (50%) of the last consignment of fish. Maxwell Asante, entrusted the sale of the consignment allocated to him for his benefit to Asamoah Company Ltd and directed that the proceeds of the sale should be paid by Asamoah Company Ltd into the account of his private firm, Sankofa Ventures Ltd. In the course of the transaction, Asamoah Company Ltd paid various sums of money being proceeds of sale of fish supplied to StarFish Company Ltd to both the Managing Director of StarFish Company Ltd and Maxwell Asante. No valid receipts were given for those payments. At the close of business, the trading account of StarFish Company Ltd showed a debit balance of over GH₵16,000.00 against Asamoah Company Ltd. StarFish Company Ltd subsequently demanded that this amount be paid. Asamoah Company Ltd resisted settlement on the grounds that it had already accounted fully for the cost of the fish sold to it on credit.

Required:

In the light of the above facts, explain whether StarFish Company Ltd would be justified in denying Maxwell Asante as an Officer of the Company.

Answer

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Tags: Company Liability, Corporate Transactions, Directors, Implied Authority
Level: Level 1

Topic: Company directors and other officers

BCL – L1 – Q85 – Company directors and other officers

Grounds for terminating an auditor’s appointment in a company.

Question

On what grounds can an auditor’s appointment be terminated?

Answer

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Tags: Auditors, Company Governance, Legal Responsibilities, Termination
Level: Level 1

Topic: Company directors and other officers

BCL – L1 – Q84 – Corporate Governance

Explain the legal roles and responsibilities of company directors in corporate governance.

Question

Explain the legal roles and responsibilities of company directors and how they contribute to effective corporate governance.

Answer

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Tags: Company Management, Corporate Governance, Directors, Fiduciary Responsibilities, Legal Duties
Level: Level 1

Topic: Corporate governance

BCL – L1 – Q83 – Corporate Liability

Analyze the legal liability of GreenFuture NGO for engaging in profit-making activities.

Question

GreenFuture NGO, an incorporated non-governmental organization has been formed with the object of greening the environment and sponsoring deprived children to go to school up to Junior High School level. During operation, the key officers of the company took a decision that the company goes into salt mining without reference to the office of the Registrar-General. Under this new arrangement, huge profits were made, the Board of Directors was reconstituted and unexpected debts were incurred. In doing so, the 17-year-old daughter of the Executive Director known as the whiz-kid in financial matters, became a Board member. The Registrar of Companies has been alerted on the happenings at the company.

Required:

(a). From the legal perspective, analyse the new arrangement and give reasons if any, why the officers and GreenFuture NGO will be liable.

(b). What are the likely actions to be taken by the Registrar-General in the circumstance of this case?

Answer

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Tags: Companies Act, Corporate Governance, Corporate Liability, Director Disqualification, Registrar-General
Level: Level 1

Topic: Registrar-General Actions

BCL – L1 – Q82 – General Meeting Notices

Identify who is entitled to receive notices of a company's general meeting.

Question

(a). Who is entitled to receive notices of a company’s general meeting?

(b). Under what circumstances will a court order a general meeting to be held?

(c). In a private company, any shareholder can convene an extraordinary general meeting’ Discuss.

(d). Unity Enterprises is to hold its annual general meeting (AGM) at the National Conference Centre soon. Due to a disagreement between the Managing Director (an Economics Professor), and the Board Chairman (a school drop-out who trades at Makola), the new company secretary (a non-lawyer), is uncertain who will determine the agenda for the meeting and also chair the AGM. The secretary has called for your views. Write down your views so you can WhatsApp a snapshot to him.

Answer

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Tags: AGM Chairmanship, Board of Directors, Companies Act, Corporate Governance
Level: Level 1

Topic: AGM Chairmanship

Title: BCL – L1 – Q81 – Auditor Appointment

State the process of appointing company auditors under the Companies Act.

Question

(a). Briefly state the process of appointing company auditors.

(b). Is there any limitation on the powers of the board of directors?

(c). Who are entitled to attend the general meetings of a company?

(d). What is a written resolution?

Answer

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Tags: Companies Act, Corporate Governance, Shareholder Rights, Written Resolution
Level: Level 1

Topic: Written Resolution

BCL – L1 – Q80 – Acts of the Company

Explain what constitutes the acts of a company under the Companies Act.

Question

(a). What constitute the acts of the company?

(b). Differentiate between ordinary resolution and special resolution.

(c). Kofi Asante is a board member of Rising Ventures Limited, a limited liability company with 10% shareholding by the Ghana Government. Kofi Asante was appointed to the BOD four years ago in accordance with the constitution allowing Dr. Kwame, Founder/Executive Chairman, and majority shareholder of the company to appoint seven of the eleven-member board. Three of board members represent workers groups and the last one comes from government per the constitutions. The Minister of Information just announced the revocation of Kofi Asante’s appointment to the BOD. Dr. Kwame called Kofi Asante to inform him the government’s announcement is null and void and should be ignored.

Who should Kofi Asante believe?

Answer

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Tags: Board of Directors, Companies Act, Corporate Governance, Director Removal, Shareholder Rights
Level: Level 1

Topic: Director Appointment and Removal

BCL – L1 – Q79 – Directors

Discuss qualifications for being a director in context of graduate unemployment.

Question

(a). ‘With the high level of graduate unemployment in Asanteland, all corporate directorship positions must be reserved for graduates.’ Discuss the qualifications for being a director.

(b). Explain the following:

(i) Substitute Director

(ii) Alternate Director

Answer

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Tags: Alternate Director, Companies Act, Corporate Governance, Substitute Director
Level: Level 1

Topic: Directors

BCL – L1 – Q78 – Company Meetings

Explain formalities and procedures for company meetings and resolutions.

Question

(a). Explain the formalities and procedures involved in conducting meetings resolutions regarding a company.

(b). Kofi Amoah is a respected head pastor of the Universal Grace Church, with impeccable pastoral and educational credentials. He holds sway when it comes to teachings on corporate transformation and generational thinking. The promoters of Unity Bank were delighted to make him the Board chairman of Unity Bank despite little knowledge and experience in banking. The first three years saw tremendous growth of the bank with profit increasing at 65% per annum. The shareholders trusted the Directors led by the ‘man of God’ to manage the bank in a ‘divine fashion’. A new Governor of the Central Bank of Asanteland has been appointed with a mandate to clean the banking sector. The man of God is nervous with regards to his job with the rapid expansion of the bank and fears he could be declared not ‘fit and proper’ to be the board chair of Unity Bank by the Governor.

Advise Pastor Kofi Amoah regarding his fiduciary responsibilities and liabilities, if any.

Answer

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Tags: Banking Regulation, Corporate Governance, Directors, Fiduciary Duties
Level: Level 1

Topic: Fiduciary Responsibilities

BCL – L1 – Q77 – Directors and Officers

Discuss ways directors are disqualified and removed from office.

Question

(a). Discuss the ways in which directors are disqualified and removed.

(b). With a decided case, explain what is meant by ‘Acts of the Company’.

(c). Distinguish between the types of meetings for limited liability companies.

Answer

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Tags: Corporate Governance, Directors, Disqualification, Fiduciary Duties, Removal
Level: Level 1

Topic: Directors and Officers

Program (SQ): PROFESSIONAL PROGRAM

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BCL – L1 – Q86 – Company directors and other officers

Can StarFish Ltd deny Maxwell Asante as a director after holding him out as one?

BCL – L1 – Q85 – Company directors and other officers

Grounds for terminating an auditor’s appointment in a company.

BCL – L1 – Q84 – Corporate Governance

Explain the legal roles and responsibilities of company directors in corporate governance.

BCL – L1 – Q83 – Corporate Liability

Analyze the legal liability of GreenFuture NGO for engaging in profit-making activities.

BCL – L1 – Q82 – General Meeting Notices

Identify who is entitled to receive notices of a company's general meeting.

Title: BCL – L1 – Q81 – Auditor Appointment

State the process of appointing company auditors under the Companies Act.

BCL – L1 – Q80 – Acts of the Company

Explain what constitutes the acts of a company under the Companies Act.

BCL – L1 – Q79 – Directors

Discuss qualifications for being a director in context of graduate unemployment.

BCL – L1 – Q78 – Company Meetings

Explain formalities and procedures for company meetings and resolutions.

BCL – L1 – Q77 – Directors and Officers

Discuss ways directors are disqualified and removed from office.

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Can StarFish Ltd deny Maxwell Asante as a director after holding him out as one?

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