Company Law – Page 10

MLP – JUL 2020 – L4 – Q1 – Legal Position of Bank in Company Diversification Loan

Advise Agyakrom Bank on its legal position regarding a negotiated loan to Ayensu Books plc for investing in a cinema and leisure complex, considering the company's objects clause, authorization requirements, and potential ultra vires issues.

Question

The main business of Ayensu Books plc is the running of a publishing company in Accra. The objects clause of the company’s regulations includes a power to borrow money as authorized by a general resolution of members. It further states that the directors may do all things that are conducive or incidental to the general business of the company and concludes with a paragraph stating that all the objects are to be regarded as distinct and separate.

The directors decided that the company should invest in a cinema and leisure complex on the Motorway Extension as a means of diversifying and offsetting its risks.

The finance director, acting on behalf of Ayensu Books, negotiated with the manager of Agyakrom Bank plc, the company’s bankers, for the borrowing of GH¢5 million to finance the development. The money is due to reach Addick’s Books bank account next month. In turn, the managing director contracted with Power Construction plc for the construction of the complex, which Power Construction has started to build, but for which it has yet to receive any payment.

Advise Agyakrom Bank on its legal position.

Answer

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Tags: borrowing authority, Company Law, Directors' Powers, Ghana Companies Act 2019, third party protection, ultra vires doctrine
Level: Level 4

Topic: Company formation, Nature of bodies corporate
Series: JULY 2020

PBL – APR 2023 – L1 – Q3 – Veil of Incorporation

Explain the meaning, benefits, and circumstances for lifting the corporate veil.

Question

a. What does the phrase the “veil of incorporation” (corporate veil) mean? (5 marks)

b. What is the benefit of having the “veil of incorporation”? (10 marks) c. When, (if at all) may the “veil” be removed? (5 marks)

Answer

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Tags: Company Law, Corporate Veil, Incorporation, Lifting the Veil, Limited Liability
Level: Level 1

Topic: Contract Law
Series: APR 2023

PBL – APR 2016 – L1 – Q5 – Private vs Public Limited Liability Companies and Conversion

Differences between a private limited liability company and a public limited liability company, and the process for converting a private company to a public one.

Question

(a) State the difference between a Private Limited Liability Company and a Public Limited Liability Company (b) Briefly describe how a Private Limited Liability company may be converted into a Public Limited Liability Company.

Answer

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Tags: Banking Customers, Borrowing Capacity, Company Law, Conversion Process, Corporate Governance, Differences, Ghana Companies Act, Private Limited Company, Public Limited Company
Level: Level 1

Topic: Contract Law
Series: APRIL 2016

FR – Nov 2023 – L2 – Q7a – Regulatory Framework for Financial Reporting

Discusses main sources of financial reporting regulations and reasons for regulatory practices.

Question

Within the context of financial reporting and regulatory frameworks:

i. Discuss the main sources of regulations. (3 Marks)
ii. Discuss TWO reasons why financial reporting practice should be regulated. (2 Marks)

Answer

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Tags: Accounting Standards, Company Law, Financial Reporting, Regulations, Regulatory Rationale, Stock Exchange
Level: Level 2

Topic: Regulatory Framework for Financial Reporting

BL – Nov 2020 – L1 – SB – Q1d – Company Law

List powers exercised by the Annual General Meeting (AGM) of a company.

Question

One of the two organs of a company is the general meeting of members.

Required:
State FOUR powers of the Annual General Meeting.

Answer

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Tags: Annual General Meeting, Company Law, Corporate Powers, Shareholder Rights
Level: Level 1

Topic: Company Law
Series: NOV 2020

BL – Nov 2020 – L1 – SA – Q4 – Company Law

Objective question testing knowledge on instances where a court may disregard corporate personality.

Question

4. A situation in which the court would disregard the distinction between the personalities of a company and its members is
A. Subrogation
B. Alienation
C. Lifting the veil of incorporation
D. Disregarding the law
E. The rule in Foss vs. Habbotle

Answer

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Tags: Company Law, Corporate Personality, Legal Principles, Veil of Incorporation
Level: Level 1

Topic: Company Law
Series: NOV 2020

BL – May 2012 – L1 – SB – Q6B – Company Law

Explain two fiduciary duties of a company director.

Question

Directors of companies are placed in special and unique positions. Their status imposes certain duties on them, and these include fiduciary duties.

Required:
Explain any TWO fiduciary duties of a company director.

Answer

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Tags: Business Law, Company Law, Directors' Duties
Level: Level 1

Topic: Company Law
Series: MAY 2012

BL – May 2012 – L1 – SB – Q6A – Company Law

Advise on the importance of filing annual returns for Xeyoze Limited.

Question

Xeyoze Limited was incorporated by the Corporate Affairs Commission on February 1, 2010. On March 1, 2011, the company bid for a contract to rehabilitate one of the nation’s oil refineries. This contract attracted scores of bidders because it was seen as a very lucrative one. A rival bidder objected to the competence of Xeyoze Limited to bid for the contract on the ground that an investigation at the Corporate Affairs Commission revealed that the company has not filed its annual returns.

Required: Advise Xeyoze Limited on the following:

(i) The importance of filing annual returns. (2 Marks)
(ii) The period within which the annual returns must be filed. (2 Marks)
(iii) The consequences of failure to file annual returns. (2 Marks)
(iv) Whether it is optional to file the annual returns or not (2 Marks)
(v) What is your advice if the contract was bid for on October 1, 2010? (3 Marks)

Answer

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Tags: Business Law, Company Law, Compliance
Level: Level 1

Topic: Company Law
Series: MAY 2012

BL – May 2012 – L1 – SB – Q1B – Company Law

Advise Halidu on transferring shares to raise money for school fees.

Question

Halidu holds one million shares in Realshares Nigeria Plc. Zaidi, his son, has just returned from the University of Basel because he could not pay school fees. Halidu is cash-strapped and wants to know whether he could transfer his shares to someone else to raise money to pay the fees.
Required: Advise Halidu, stating the statutory conditions by which he could transfer his shares. (5 Marks)

Answer

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Tags: Business Law, Company Law, Share Transfer
Level: Level 1

Topic: Company Law
Series: MAY 2012

BL – May 2012 – L1 – SA – Q18 – Company Law

Identify the concept that allows a company to continue existing despite changes in ownership.

Question

The fact that a company cannot die connotes that it has:

Answer

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Tags: Business Law, Company Law, Perpetual Succession
Level: Level 1

Topic: Company Law
Series: MAY 2012

BL – Nov 2023 – L1 – SA – Company Law

This question asks which type of company may hold a virtual general meeting.

Question

Which of the following companies may hold a virtual general meeting?
A. Commercial company
B. Mortgage company
C. Private company
D. Bank holding company
E. Hybrid company

Answer

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Tags: Company Law, Corporate Governance, Virtual Meetings
Level: Level 1

Topic: Company Law
Series: NOV 2023

BL – Nov 2023 – L1 – SA – Q7 – Company Law

This question asks about the chairmanship of the Administrative Committee of the Corporate Affairs Commission.

Question

The Administrative Committee of the Corporate Affairs Commission is chaired by the
A. Minister of State for Investment
B. Business Name Registrar
C. Registrar General of the Corporate Affairs Commission
D. Administrative Secretary of the Corporate Affairs Commission
E. Secretary to the Corporate Affairs Commission

Answer

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Tags: Administrative Law, Company Law, Corporate Affairs Commission
Level: Level 1

Topic: Company Law
Series: NOV 2023

BL – Nov 2019 – L1 – SB – Q4a Contract Law

Conditions under which a company may be placed in receivership.

Question

An insolvent company has several alternatives to liquidation.
Required:
State FOUR conditions under which a company may be placed in receivership. (4 Marks)

Answer

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Tags: Company Law, Insolvency, Liquidation, Receivership
Level: Level 1

Topic: Contract Law
Series: NOV 2019

BL – Nov 2019 – L1 – SB – Q3a – Company Law

Legal advice on the entitlement of a director to remuneration and reimbursement in the absence of an agreement.

Question

Bala and Yesufu are joint directors and shareholders of YEBA Limited, which was incorporated in 2015. Yesufu was appointed the Managing Director, and Bala, the Operations Director. The Articles of Association of YEBA Limited were silent on directors’ remuneration, and there was no written agreement to pay remuneration to the directors of the company.

Bala had attended several board meetings from 2015 to 2017, travelling from Abuja to Lagos at his own expense. In 2018, Bala wrote to YEBA Limited through Yesufu, claiming N2 million annual director’s remuneration for years 2015 to 2017, as well as a total sum of N2 million reimbursement of his travelling expenses for the same period.

YEBA Limited has refused to pay both claims, insisting that there is no agreement for such payments to be made to the directors of the company. Bala is aggrieved and intends to take legal action against YEBA Limited.

Required:
Advise Bala, stating the legal issues involved.

(8 Marks)

Answer

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Tags: Articles of Association, Company Law, Director Remuneration, Reimbursement
Level: Level 1

Topic: Company Law
Series: NOV 2019

BL – Nov 2019 – L1 – SB – Q1c – Company Law

Explanation of circumstances that may disqualify a director from office.

Question

Company directors are appointed by the shareholders to manage the company.
Required:
Explain briefly FIVE circumstances that may disqualify a director from office. (10 Marks)

Answer

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Tags: Company Law, Directors, Disqualification, Shareholders
Level: Level 1

Topic: Contract Law
Series: NOV 2019

BL – May 2023 – L1 – SB – Q4A – Company Law

Explain the steps in the procedure for the removal of statutory auditors from a public company.

Question

The Companies and Allied Matters Act, 2020 stipulates that public companies must appoint statutory auditors.

Required:
Explain briefly FOUR of the steps in the procedure for the removal of auditors of a public company before the expiration of their tenure of office.

Answer

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Tags: Auditors, Company Law, Legal Compliance, Removal Procedures
Level: Level 1

Topic: Company Law
Series: MAY 2023

BL – May 2023 – L1 – SB – Q3D – Company Law

Identify the persons who can petition the court for the winding up of a public company.

Question

A public company may be wound up by order of court.

Required:
State FOUR persons that could petition the court for the winding up of a public company.

Answer

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Tags: Company Law, Legal Proceedings, Public Company, Winding-up
Level: Level 1

Topic: Company Law
Series: MAY 2023

BL – May 2023 – L1 – SA – Q20 – Company Law

Identify the maximum turnover threshold for a small company under the Companies and Allied Matters Act.

Question

The maximum turnover of a small company under the Companies and Allied Matters Act, 2020 is:

A. ₦160,000,000
B. ₦150,000,000
C. ₦140,000,000
D. ₦130,000,000
E. ₦120,000,000

Answer

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Tags: Company Law, Financial Threshold, Small Company
Level: Level 1

Topic: Company Law
Series: MAY 2023

BL – May 2023 – L1 – SA – Q15 – Company Law

Identify the effect of a receivership order on company operations.

Question

Which of the following is an effect of a receivership order?

A. Powers of the company directors cease
B. The Company Secretary becomes the Receiver Manager
C. The shareholders take over the company’s assets
D. The official receiver locks up the company
E. The debtors are imprisoned

Answer

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Tags: Business operations, Company Law, Legal Effects, Receivership
Level: Level 1

Topic: Company Law
Series: MAY 2023

BL – May 2023 – L1 – SA – Q14 – Company Law

Identify who appoints the first statutory auditors of a company.

Question

…………………. appoints the first statutory auditors of a company.

A. Audit Committee
B. Finance Executive
C. Company Secretary
D. Board of Directors
E. Shareholders

Answer

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Tags: Appointments, Company Law, Legal Framework, Statutory Auditors
Level: Level 1

Topic: Company Law
Series: MAY 2023

Question Tag: Company Law

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MLP – JUL 2020 – L4 – Q1 – Legal Position of Bank in Company Diversification Loan

Advise Agyakrom Bank on its legal position regarding a negotiated loan to Ayensu Books plc for investing in a cinema and leisure complex, considering the company's objects clause, authorization requirements, and potential ultra vires issues.

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PBL – APR 2023 – L1 – Q3 – Veil of Incorporation

Explain the meaning, benefits, and circumstances for lifting the corporate veil.

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PBL – APR 2016 – L1 – Q5 – Private vs Public Limited Liability Companies and Conversion

Differences between a private limited liability company and a public limited liability company, and the process for converting a private company to a public one.

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FR – Nov 2023 – L2 – Q7a – Regulatory Framework for Financial Reporting

Discusses main sources of financial reporting regulations and reasons for regulatory practices.

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BL – Nov 2020 – L1 – SB – Q1d – Company Law

List powers exercised by the Annual General Meeting (AGM) of a company.

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BL – Nov 2020 – L1 – SA – Q4 – Company Law

Objective question testing knowledge on instances where a court may disregard corporate personality.

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BL – May 2012 – L1 – SB – Q6B – Company Law

Explain two fiduciary duties of a company director.

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BL – May 2012 – L1 – SB – Q6A – Company Law

Advise on the importance of filing annual returns for Xeyoze Limited.

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BL – May 2012 – L1 – SB – Q1B – Company Law

Advise Halidu on transferring shares to raise money for school fees.

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BL – May 2012 – L1 – SA – Q18 – Company Law

Identify the concept that allows a company to continue existing despite changes in ownership.

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BL – Nov 2023 – L1 – SA – Company Law

This question asks which type of company may hold a virtual general meeting.

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BL – Nov 2023 – L1 – SA – Q7 – Company Law

This question asks about the chairmanship of the Administrative Committee of the Corporate Affairs Commission.

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BL – Nov 2019 – L1 – SB – Q4a Contract Law

Conditions under which a company may be placed in receivership.

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BL – Nov 2019 – L1 – SB – Q3a – Company Law

Legal advice on the entitlement of a director to remuneration and reimbursement in the absence of an agreement.

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BL – Nov 2019 – L1 – SB – Q1c – Company Law

Explanation of circumstances that may disqualify a director from office.

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BL – May 2023 – L1 – SB – Q4A – Company Law

Explain the steps in the procedure for the removal of statutory auditors from a public company.

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BL – May 2023 – L1 – SB – Q3D – Company Law

Identify the persons who can petition the court for the winding up of a public company.

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BL – May 2023 – L1 – SA – Q20 – Company Law

Identify the maximum turnover threshold for a small company under the Companies and Allied Matters Act.

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BL – May 2023 – L1 – SA – Q15 – Company Law

Identify the effect of a receivership order on company operations.

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BL – May 2023 – L1 – SA – Q14 – Company Law

Identify who appoints the first statutory auditors of a company.

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