Company Law – Page 8

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 2021 – L1 – SA – Q6 – Company Law

Understanding the role of a court-appointed receiver.

Question

A Receiver of any undertaking of a company appointed by the court is an officer of the
A. Court
B. Shareholders
C. Company
D. Board of directors
E. Company’s secured creditors

Answer

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Tags: Company Law, Receivership
Level: Level 1

Topic: Company Law
Series: NOV 2021

BL – Nov 2021 – L1 – SA – Q5 – Company Law

Assigning responsibility for preparing financial statements of a company.

Question

With particular reference to section 377 of the Companies and Allied Matters Act 2020, whose duty is it to prepare the financial statements of a company for each year?
A. The directors
B. The chief accountant
C. The account clerks
D. The auditor
E. The company secretary

Answer

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Tags: Company Law, Financial Statements
Level: Level 1

Topic: Company Law
Series: NOV 2021

BL – Nov 2021 – L1 – SA – Q4 – Company Law

Conditions for foreign limited liability partnerships operating in Nigeria.

Question

A foreign limited liability partnership
A. Can carry on business in Nigeria provided it is registered in its home country
B. Cannot carry on business in Nigeria without being incorporated in Nigeria
C. Need not register afresh in Nigeria before carrying on business in Nigeria
D. Is prohibited in Nigeria under the Companies and Allied Matters Act 2020
E. Must admit Nigerians as partners under the Companies and Allied Matters Act before carrying on business in Nigeria

Answer

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Tags: Business Entities, Company Law, Nigerian Law
Level: Level 1

Topic: Company Law
Series: NOV 2021

BL – Nov 2022 – L1 – SB – Q1c – Company Law

Listing the items contained in a statutory report submitted by a public company.

Question

The directors of a public company are required to submit a statutory report within a specified period to every member before the date of the statutory meeting.

Required:
State six items contained in the statutory report.

Answer

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Tags: Company Law, Public Company, Statutory Report
Level: Level 1

Topic: Company Law
Series: NOV 2022

BL – Nov 2022 – L1 – SB – Q1b – Company Law

Explaining the main features of sole proprietorship as a business organization.

Question

The Companies and Allied Matters Act (CAMA) recognizes different forms of business organizations.

Required:
Explain briefly three main features of sole proprietorship as a business organization.

Answer

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Tags: Business Formation, Company Law, Sole Proprietorship
Level: Level 1

Topic: Company Law
Series: NOV 2022

BL – May 2022 – L1 – SA – Q9 – Company Law

Identify the type of company that may have less than two directors.

Question

Which of the following may have less than two directors?
A. Insurance company
B. Tax consultancy company
C. Small company
D. Unlimited liability company
E. Company limited by guarantee

Answer

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Tags: Company Law, Corporate Governance, Directors
Level: Level 1

BL – May 2022 – L1 – SA – Q8 – Company Law

Identify which entity may not appoint a company secretary.

Question

Which of the following may NOT appoint a Company Secretary?
A. Private company
B. Single shareholder company
C. Company limited by guarantee
D. Public company
E. Asset management company

Answer

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Tags: Appointment, Company Law, Company Secretary
Level: Level 1

Topic: Company Law
Series: MAY 2022

BL – May 2022 – L1 – SA – Q7 – Company Law

Identify the conditions under which a private company may hold a virtual general meeting.

Question

A private company may hold a virtual general meeting if
A. Authorised by directors’ resolution
B. Authorised by its articles of association
C. There is an emergency
D. Members agree
E. Creditors agree

Answer

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Tags: Company Law, Private companies, Virtual Meetings
Level: Level 1

Topic: Company Law
Series: MAY 2022

BL – May 2022 – L1 – SA – Q6 – Company Law

Define when a company is said to be insolvent.

Question

A company is said to be insolvent when the
A. Company is in a financial distress and it is unable to pay its debt
B. Board of directors has refused to act
C. Managing Director of the company dies
D. Articles of association of the company is altered
E. Business of the company is to solve financial crisis

Answer

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Tags: Company Law, Debt Payment, Insolvency
Level: Level 1

Topic: Company Law
Series: MAY 2022

BL – May 2022 – L1 – SA – Q5 – Company Law

Identify the principle established in the Salomon vs Salomon case.

Question

The case of Salomon vs Salomon is an authority for the principle of
A. Majority rule and minority right protection
B. Indoor management rule
C. Ultra vires doctrine
D. Corporate personality
E. The rule in Turquand

Answer

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Tags: Company Law, Corporate Personality, Salomon vs Salomon
Level: Level 1

Topic: Company Law
Series: MAY 2022

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 2021 – L1 – SA – Q6 – Company Law

Understanding the role of a court-appointed receiver.

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BL – Nov 2021 – L1 – SA – Q5 – Company Law

Assigning responsibility for preparing financial statements of a company.

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BL – Nov 2021 – L1 – SA – Q4 – Company Law

Conditions for foreign limited liability partnerships operating in Nigeria.

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BL – Nov 2022 – L1 – SB – Q1c – Company Law

Listing the items contained in a statutory report submitted by a public company.

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BL – Nov 2022 – L1 – SB – Q1b – Company Law

Explaining the main features of sole proprietorship as a business organization.

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BL – May 2022 – L1 – SA – Q9 – Company Law

Identify the type of company that may have less than two directors.

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BL – May 2022 – L1 – SA – Q8 – Company Law

Identify which entity may not appoint a company secretary.

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BL – May 2022 – L1 – SA – Q7 – Company Law

Identify the conditions under which a private company may hold a virtual general meeting.

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BL – May 2022 – L1 – SA – Q6 – Company Law

Define when a company is said to be insolvent.

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BL – May 2022 – L1 – SA – Q5 – Company Law

Identify the principle established in the Salomon vs Salomon case.

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