Company Law – Page 3

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 2012 – L1 – SA – Q14 – Company Law

Identify the minimum authorized share capital for a private limited company.

Question

What is the minimum authorized Share Capital of a Private Limited Liability Company as prescribed by Companies and Allied Matters Act LFN 2004?

Answer

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Tags: Company Law, Share Capital
Level: Level 1

Topic: Company Law
Series: NOV 2012

BL – Nov 2012 – L1 – SA – Q20 – Company Law

Identify the document that authorizes directors' remuneration.

Question

A director is not entitled to remuneration unless it is authorized by which of the following documents?

A. The memorandum of association
B. The directors’ manual
C. The company’s handbook
D. The articles of association
E. The shareholders’ book

Answer

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Tags: Company Law, Directors, Remuneration
Level: Level 1

Topic: Company Law
Series: NOV 2012

BL – Nov 2012 – L1 – SA – Q15 – Company Law

Identify which clause limits ultra vires actions in a company.

Question

An act of a company which is considered as ultra vires is that which is not authorized by ONE of the following:
A. Subjects clause
B. Directors clause
C. Authorization clause
D. Shareholders clause
E. Objects clause

Answer

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Tags: Acts of Company, Company Law, Ultra Vires
Level: Level 1

Topic: Company Law
Series: NOV 2012

BL – Nov 2012 – L1 – SA – Q14 – Company Law

Identify what must not be in the Memorandum of Association.

Question

The Memorandum of Association of a company limited by shares must contain all the following EXCEPT:
A. The marital status of the subscribers
B. The name of the company with “Limited” as the last word
C. That the registered office of the company will be situated in Nigeria
D. The objects of the company
E. That the liability of the members is limited

Answer

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Tags: Company Law, Corporate Structure, Memorandum of Association
Level: Level 1

Topic: Company Law
Series: NOV 2012

BL – May 2013 – L1 – SB – Q5D – Company Law

Explain the procedure to fill a casual vacancy in the office of the company’s auditor.

Question

Chief Ogongo, the Chairman of the recently incorporated Fortune Finance Limited,
has requested your advice on the appointment of auditors of the company,
particularly on the following issues:

What should be done where there is a casual vacancy in the offices of the auditors?

Answer

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Tags: Auditor, Casual Vacancy, Company Law
Level: Level 1

Topic: Company Law
Series: MAY 2013

BL – May 2013 – L1 – SB – Q5C – Company Law

Discuss what happens if no auditors are appointed at the AGM.

Question

Chief Ogongo, the Chairman of the recently incorporated Fortune Finance Limited,
has requested your advice on the appointment of auditors of the company,
particularly on the following issues:

What happens if, at an Annual General Meeting, no auditors were appointed or re-appointed?

Answer

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Tags: Company Law, Failure to Appoint Auditors
Level: Level 1

Topic: Company Law
Series: MAY 2013

BL – May 2013 – L1 – SB – Q5B – Company Law

Explain how existing auditors can be re-appointed without objection at the AGM.

Question

Chief Ogongo, the Chairman of the recently incorporated Fortune Finance Limited,
has requested your advice on the appointment of auditors of the company,
particularly on the following issues:

How would the existing auditors of the company, desirous of re-election at the next Annual General Meeting, and without objection, be re-appointed?

Answer

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Tags: Company Law, Re-Appointment of Auditors
Level: Level 1

Topic: Company Law
Series: MAY 2013

BL – May 2013 – L1 – SB – Q5A – Company Law

Explain how the first auditors of a company are appointed.

Question

Chief Ogongo, the Chairman of the recently incorporated Fortune Finance Limited,
has requested your advice on the appointment of auditors of the company,
particularly on the following issues:

How will the first auditors of the company be appointed?

Answer

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Tags: Appointment of Auditors, Company Law, First Auditors
Level: Level 1

Topic: Company Law
Series: MAY 2013

BL – May 2013 – L1 – SA – Q9 – Company Law

This question tests the time frame for filing a return on the allotment of shares.

Question

Within what period must a company limited by shares file a return on allotment of shares with the Corporate Affairs Commission for registration?

Answer

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Tags: Allotment of Shares, Company Law
Level: Level 1

Topic: Company Law
Series: MAY 2013

BL – May 2013 – L1 – SA – Q8 – Company Law

This question tests knowledge of the type of company that must not have share capital.

Question

A company that must NOT have share capital is ___________.

Answer

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Tags: Company Law, Limited by Guarantee
Level: Level 1

Topic: Company Law
Series: MAY 2013

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 2012 – L1 – SA – Q14 – Company Law

Identify the minimum authorized share capital for a private limited company.

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BL – Nov 2012 – L1 – SA – Q20 – Company Law

Identify the document that authorizes directors' remuneration.

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BL – Nov 2012 – L1 – SA – Q15 – Company Law

Identify which clause limits ultra vires actions in a company.

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BL – Nov 2012 – L1 – SA – Q14 – Company Law

Identify what must not be in the Memorandum of Association.

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BL – May 2013 – L1 – SB – Q5D – Company Law

Explain the procedure to fill a casual vacancy in the office of the company’s auditor.

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BL – May 2013 – L1 – SB – Q5C – Company Law

Discuss what happens if no auditors are appointed at the AGM.

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BL – May 2013 – L1 – SB – Q5B – Company Law

Explain how existing auditors can be re-appointed without objection at the AGM.

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BL – May 2013 – L1 – SB – Q5A – Company Law

Explain how the first auditors of a company are appointed.

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BL – May 2013 – L1 – SA – Q9 – Company Law

This question tests the time frame for filing a return on the allotment of shares.

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BL – May 2013 – L1 – SA – Q8 – Company Law

This question tests knowledge of the type of company that must not have share capital.

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