PROFESSIONAL PROGRAM – Page 41

BCL – L1 – Q66 – Governance and ethical issues relating to business

Explain governance issues and director disqualification factors in a case involving fraud at a company.

Question

In 2015, KWEKU LTD, which carries on the business of exporting cassava and mangoes from Ghana to Europe, opened an account with Zenith Bank at the Tema Branch. In 2016, the Finance Manager, who is the sole accounts officer of the company, forged the signature of the Managing Director (who was also the sole signatory to the bank account of the company) and made several withdrawals from the company to the tune of GH₵550,000. The bank in that same year requested that the Managing Director should, within two weeks of the letter, confirm the credit balance on the account, which at the time stood at GH₵2,200,000. The Managing Director, without any further checks, signed the document, thus confirming the credit balance presented by the bank. In 2017, the auditors raised queries on some of the fictitious withdrawals. The Chairman of the Board ordered the Human Resource Manager to dismiss both the Managing Director and the Finance Manager with immediate effect.

Required:

(a) Explain FOUR (4) issues in the case relating to governance and duties of directors. (10 marks)

(b) Explain THREE (3) factors that disqualify a person from being appointed as a director. (10 marks)

Answer

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Tags: Board authority, Corporate Governance, Directors duties, Disqualification, Fiduciary duty, Fraud, Termination
Level: Level 1

Topic: overnance and ethical issues relating to business

BCL – L1 – Q65 – Partnership dissolution

Explain reasons for refusing partnership registration, modes of winding up, asset application, and partner liability.

Question

SUNDRY ISSUES

(a) What may account for the Registrar refusing to register a partnership agreement?

(b) State three modes of winding up of a firm and indicate who can initiate each.

(d) State briefly the nature of a partner’s liability.

Answer

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Tags: Asset distribution, Business law, Corporate Governance, Ghana company law, Partnership agreement, Partnership dissolution, Partnership liabilities, Registrar refusal, Winding up
Level: Level 1

Topic: Alternative forms and constitutions of business organisations

BCL – L1 – Q64 – Partnership formation

Analyze issues in a partnership agreement and list items to verify for a valid partnership involving an employee and family members.

Question

KOFI

Kofi was employed as a senior wholesale manager by AB Limited, a limited liability company owned 100% by Mr. Adu. Kofi’s monthly salary is $30,000 and has been so for the last five years. To prevent Kofi from leaving the company, Mr. Adu went into agreement with him whereby AB Limited, Kofi and twenty family members of Mr. Adu formed a partnership. Kofi will get $40,000 as monthly salary and 10% of gross profit as bonus as and when Mr. Adu deem it fit. Kofi must give six months’ notice for resignation but could be fired without notice by Mr. Adu. Kofi has no role in management, control or in carrying out the partnership business. Kofi is happy with his new salary but thinks all is not right.

(a) What is not right?

(b) State five other items Kofi must verify in a partnership agreement.

Answer

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Tags: Business formation, Business law, Corporate Governance, Fiduciary duty, Ghana company law, Legal entity, Partnership agreement, Partnership dissolution, Partnership liabilities, Profit sharing
Level: Level 1

Topic: Alternative forms and constitutions of business organisations

BCL – L1 – Q63 – Pre-incorporation contracts

Advise on company registration refusal, corporate veil lifting, and pre-incorporation contract issues for a company formed in Ghana.

Question

LINA

(a) Under what circumstances will the Registrar refuse to register constitution of a Company?

(6 marks)

(b) Explain the circumstances under which the corporate veil could be lifted or pierced.

(c) Lina lives in the United Kingdom (UK) and asked her long-time friend, Esi to register a company for her in Ghana. Esi spent $10,000 on documentation, filling and processing, (with the issuance of receipts being Esi’s name) all covered with receipts in her name. Upon the request of Lina, Esi rented an office premises for one year at GH₵20,000 with the receipt in the name of the newly formed company. Lina just returned from UK to start operations. Lina discovered that the rental agent gave GH₵2,000 to Esi as inducement for the office deal. Lina appointed Esi as head of operations and refused to pay the registration expenses on the basis that Esi’s monthly salary as head of operations is more than GH₵10,000 and those expenses should be borne from the secret profits Esi had earlier enjoyed.

Required:

Based on your knowledge in pre-incorporation contracts, advise the parties.

Answer

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Tags: Business formation, Company registration, Corporate Governance, Corporate veil, Fiduciary duty, Ghana company law, Legal entity, Partnership liabilities, Pre-incorporation contracts, Secret profits
Level: Level 1

Topic: Alternative forms and constitutions of business organisations

BCL – L1 – Q62 – Alternative forms and constitutions of business organisations

Write short notes on a company limited by guarantee.

Question

Write short notes on the following:

(a) Company limited by guarantee

(b) Choice of company name

(d) External Companies

(e) Company promoter

Answer

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Tags: Company formation, Company promoter, Fiduciary duty
Level: Level 1

Topic: Alternative forms and constitutions of business organisations

BCL – L1 – Q61 – Alternative forms and constitutions of business organisations

Recommend whether Hajia Amina’s business should remain a sole proprietorship or convert to a private limited company.

Question

Your mother trades in locally made fruit juice in a container at the front of the house at Adiembra-Zongo. The booming business is putting pressure on her working capital. But she plans to open two new retail branches and a semi-wholesale by the end of the year using sale proceeds of her private car which will not be enough. A bank manager working on her personal loan application advised her to convert the sole proprietorship into a private limited liability company, but your mother thinks that will reduce her power and influence. She adores the business name registration certificate with her name boldly engraved ‘HAJIA AMINA SIEDU ENTERPRISE’.

(a) Which of the options will you recommend?

(b). Discuss why you would support your mother’s position or that of the bank manager.

Answer

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Tags: Advantages, Disadvantages, Limited Liability Company, Sole proprietorship
Level: Level 1

Topic: Alternative forms and constitutions of business organisations

BCL – L1 – Q60 – Alternative forms and constitutions of business organisations

Explain the difference between private and public companies with examples from Ghana.

Question

(a). Explain the main difference between a private and a public company. Give an example of each from Ghana.

(b). Discuss four duties of a promoter.

(c). Explain six items that must be in the constitution of a company for registration.

Answer

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Tags: Companies Act, Company constitution, Registration requirements
Level: Level 1

Topic: Alternative forms and constitutions of business organisations

BCL – L1 – Q59 – Alternative forms and constitutions of business organisations

Advise Ama, Dela, John, and Mr. Addo on forming a consultancy partnership, considering capital contributions and partner eligibility.

Question

Ama, Dela, and John were classmates from ICAG 2014 batch of graduates. They intend to form a consultancy firm/partnership in the future by pooling resources together. Ama’s 2005 Toyota Siena estimated at GH¢40,000 will be her initial capital contribution towards the formation of the partnership. However, the car is currently registered in the name of her father, Mr. Addo, a 59-year-old Chief Accountant for Zenith Energy Limited, who desires to be part of the daughter’s business upon retirement and will not let go of title to the car without any benefit. Dela and John, who are contributing GH¢30,000 each of the initial capital, are opposed to any ‘old-school’ accountant being part of their partnership.

You are the most-rated business law student. Advise the parties.

Answer

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Tags: Business formation, Capital contribution, Legal advice, Partnership, Partnership agreement
Level: Level 1

Topic: Alternative forms and constitutions of business organisations

BCL – L1 – Q58 – Alternative forms and constitutions of business organisations

Explain legal distinctions between sole proprietorship, partnerships, and companies.

Question

(a). Explain the legal distinctions between a sole proprietorship, partnerships, and companies.

(b). Describe the types of companies under the Companies Act 2019 (Act 992).

(c). Explain the effect of separate legal personality and the veil of incorporation of companies.

Answer

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Tags: Companies, Companies Act, Legal Concepts, Separate Legal Personality, Veil of Incorporation
Level: Level 1

Topic: Alternative forms and constitutions of business organisations

BCL – L1 – Q57 – Alternative forms and constitutions of business organisations

Explain key characteristics, advantages, and disadvantages of a sole trader.

Question

(a). Explain the key characteristics of being a sole trader. What advantages and disadvantages do they give?

(bi). Section 3 of Incorporated Private Partnerships Act, 1962 (Act 152) states that ‘Partnership means the association of two or more individuals carrying on business jointly for the purpose of making profits’. Suppose you had set up an unregistered business for buying and selling second-hand vehicles with two friends, and you decided to call it Triad Car Dealers, determine the following:

(i) Whether there can be a valid partnership with your two friends if you own 85% of the total assets of the business?

(ii) Who makes the decisions which affect the nature and running of the business?

(iii) Describe the liability of various partners for partnership debts.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business organisations, Debts, Incorporated Private Partnership Act, Liability, Partnership
Level: Level 1

Topic: Alternative forms and constitutions of business organisations

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BCL – L1 – Q66 – Governance and ethical issues relating to business

Explain governance issues and director disqualification factors in a case involving fraud at a company.

BCL – L1 – Q65 – Partnership dissolution

Explain reasons for refusing partnership registration, modes of winding up, asset application, and partner liability.

BCL – L1 – Q64 – Partnership formation

Analyze issues in a partnership agreement and list items to verify for a valid partnership involving an employee and family members.

BCL – L1 – Q63 – Pre-incorporation contracts

Advise on company registration refusal, corporate veil lifting, and pre-incorporation contract issues for a company formed in Ghana.

BCL – L1 – Q62 – Alternative forms and constitutions of business organisations

Write short notes on a company limited by guarantee.

BCL – L1 – Q61 – Alternative forms and constitutions of business organisations

Recommend whether Hajia Amina’s business should remain a sole proprietorship or convert to a private limited company.

BCL – L1 – Q60 – Alternative forms and constitutions of business organisations

Explain the difference between private and public companies with examples from Ghana.

BCL – L1 – Q59 – Alternative forms and constitutions of business organisations

Advise Ama, Dela, John, and Mr. Addo on forming a consultancy partnership, considering capital contributions and partner eligibility.

BCL – L1 – Q58 – Alternative forms and constitutions of business organisations

Explain legal distinctions between sole proprietorship, partnerships, and companies.

BCL – L1 – Q57 – Alternative forms and constitutions of business organisations

Explain key characteristics, advantages, and disadvantages of a sole trader.

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Explain governance issues and director disqualification factors in a case involving fraud at a company.

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Explain reasons for refusing partnership registration, modes of winding up, asset application, and partner liability.

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Analyze issues in a partnership agreement and list items to verify for a valid partnership involving an employee and family members.

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Advise on company registration refusal, corporate veil lifting, and pre-incorporation contract issues for a company formed in Ghana.

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Write short notes on a company limited by guarantee.

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Recommend whether Hajia Amina’s business should remain a sole proprietorship or convert to a private limited company.

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Explain the difference between private and public companies with examples from Ghana.

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Advise Ama, Dela, John, and Mr. Addo on forming a consultancy partnership, considering capital contributions and partner eligibility.

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Explain legal distinctions between sole proprietorship, partnerships, and companies.

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Explain key characteristics, advantages, and disadvantages of a sole trader.

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