The issue to be determined is whether StarFish Company Ltd. is estopped from denying that Maxwell Asante held himself out as a director of the Company, even though he was not appointed a director.
For the following reasons, StarFish Company Ltd will not be justified in denying Maxwell Asante as a director of the Company.

• The Company allowed Maxwell Asante to transact the fish business with Asamoah Company Ltd. and third parties, on its behalf, and also received payments.
  • That means that the Company necessarily conferred an implied authority on Maxwell.
  • It further demonstrates the kind and nature of the authority exercisable by Maxwell as a director held out by the Company.
• The Company allowed Maxwell Asante to share in its profits.
• Section 198(1) of the Companies Act, 1963, (Act 179) provides that, “Every Company shall in all trade circulars and business letters on or in which the Company’s name appears state in legible characters with respect to every director,”
  • In compliance with this requirement, the Company printed the names of its directors on all its letterheads and among the directors was Maxwell Asante.
  • It showed that although Maxwell Asante was never appointed a director, the Company, however, held him out as such.
    From the above it is to be stated as follows:
• As between outsiders such as Asamoah Company Ltd. and StarFish Company Ltd., the Company was bound by all the acts done by Maxwell Asante in relation to Asamoah Co. Ltd., including receiving payments on behalf of the Prime Company Ltd, so far as the transaction is within the scope of his office as director.
• See the Rule in the case of Royal British Bank Vrs Turquand (1856) 6 E 18 BI. 327, where it was stated that “person who entered into contract with a company and dealt in good faith with that Company, had the right to assume that acts within the Constitution and powers of the Company had been duly and properly performed. Such persons were under no duty to enquire whether acts internal preliminaries and management has been regularly performed”.
• See also the case of Re: County Life Assurance Co. (1870) 22 L.T 537 at page 538-539, where Gifford L.J explains as follows:
  “The company is bound by what takes place in the usual course of business with a third party, provided that, the third-party deals fairly and bona fide with persons who may be termed de facto directors persons who might very possibly have been de jure directors”.
  In the circumstance of this case, the acts of Maxwell Asante, though an improper director, were binding on StarFish Company Ltd. because no steps were taken by the company to stop Maxwell Asante removed.
  See Section 179 and Section 179(2) (a) and (b) provide as follows:
  “179(2) Any person, not duly appointed director of a company:
• who shall hold himself out or knowingly allow himself to be held out as a director of that company, or
• on whose direction or instructions the duly appointed directors are accustomed to act, Shall be subject to the same duties and liable as if he were a duly appointed director of the company.
  Maxwell Asante, having allowed himself to be held out by the Company as a director, was in law subject to the duties and liabilities as a director. He successfully transacted the business of StarFish Company Ltd with Asamoah Company Ltd, who acting in good faith, assumed that when the Company held him out as a director, he was in fact appointed in accordance with the Regulations of the Company. StarFish Company Ltd will, therefore, not be justified in denying Maxwell Asante as director of the Company, as the Company itself held Maxwell Asante out as a director.