Subject (SQ): BUSINESS AND CORPORATE LAW
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- 20 Marks
Discuss AGM requirements, notice contents, consequences of non-compliance, binding decisions, and privity of contract under Ghanaian law.
Question
Kofi Amoah, the CEO of your company, is preparing for a top management meeting scheduled for 1st December 2021. One of the issues to be discussed is the effect of COVID-19 on holding shareholders’ meetings. There are views that the Annual General Meeting (AGM) must be in-person so that members can vote on resolutions to be passed. Others believe that the AGM should be virtual or hybrid.
Some shareholders believe that the items on the agenda are too many and that they would need two days to have a meaningful discussion. Kwame Boateng, a shareholder has decided not to attend the AGM if it is organized virtually.
Required:
As a business law student, your boss has requested you to present to him the following:
(a) The requirement of the Companies Act, 2019 (Act 992) on the interval between which AGM are to be held.
(b) THREE (3) things that should be covered in the notice for an AGM.
(c) TWO (2) consequences of not holding an annual general meeting in accordance with the Companies Act.
(d) Discuss whether decisions taken at the AGM will be binding on Kwame Boateng.
(e) What is meant by the doctrine of “Privity of contract” and identify TWO (2) exceptions allowed under the Contract Act, 1960 (Act 25) in Ghana?
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- 10 Marks
List three civil liabilities for a director breaching fiduciary duties and conflict of interest rules.
Question
As part of the duty, a director of a company stands in a fiduciary relationship towards the company and shall observe the utmost good faith towards the company in a transaction with it or on its behalf. He or She shall always act in what the director believes to be the best interests of the company as a whole to preserve its assets, further its business, and promote the purposes for which it was formed, and in a manner that a faithful, diligent, careful and skilful that ordinarily a Director would act in the circumstances. Besides, a director is not to use for his own advantage the money or property of the company or a confidential information or special knowledge obtained in his capacity.
Required:
List THREE (3) civil liabilities that are to be brought against a director who commits a breach of duty and violates the rules regarding conflict of interest.
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- 10 Marks
Items required in the register of members/shareholders of a company.
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- 10 Marks
Can StarFish Ltd deny Maxwell Asante as a director after holding him out as one?
Question
StarFish Company Ltd, traders in frozen fish, entered into an oral agreement for the supply and sale on credit basis, of all its frozen fish to Asamoah Company Ltd. The affairs and the business of StarFish Company Ltd were undertaken by its Managing Director and one Maxwell Asante. Maxwell Asante was never appointed by the Company as a director, but he transacted business on behalf of StarFish Company Ltd with Asamoah Company Ltd, as if he were a director and the Chief Executive Officer of the Company. Maxwell Asante acted on behalf of the Company by signing the applications for the Company to be registered as an importer, apart from financially assisting the Company to start business. The name of Maxwell Asante also appeared on the Company’s letterhead as one of its directors.
StarFish Company Ltd allowed Maxwell Asante to share in its profits by allocating to him fifty percent (50%) of the last consignment of fish. Maxwell Asante, entrusted the sale of the consignment allocated to him for his benefit to Asamoah Company Ltd and directed that the proceeds of the sale should be paid by Asamoah Company Ltd into the account of his private firm, Sankofa Ventures Ltd. In the course of the transaction, Asamoah Company Ltd paid various sums of money being proceeds of sale of fish supplied to StarFish Company Ltd to both the Managing Director of StarFish Company Ltd and Maxwell Asante. No valid receipts were given for those payments. At the close of business, the trading account of StarFish Company Ltd showed a debit balance of over GH₵16,000.00 against Asamoah Company Ltd. StarFish Company Ltd subsequently demanded that this amount be paid. Asamoah Company Ltd resisted settlement on the grounds that it had already accounted fully for the cost of the fish sold to it on credit.
Required:
In the light of the above facts, explain whether StarFish Company Ltd would be justified in denying Maxwell Asante as an Officer of the Company.
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- 10 Marks
Grounds for terminating an auditor’s appointment in a company.
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- 10 Marks
Explain the legal roles and responsibilities of company directors in corporate governance.
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- 20 Marks
Analyze the legal liability of GreenFuture NGO for engaging in profit-making activities.
Question
GreenFuture NGO, an incorporated non-governmental organization has been formed with the object of greening the environment and sponsoring deprived children to go to school up to Junior High School level. During operation, the key officers of the company took a decision that the company goes into salt mining without reference to the office of the Registrar-General. Under this new arrangement, huge profits were made, the Board of Directors was reconstituted and unexpected debts were incurred. In doing so, the 17-year-old daughter of the Executive Director known as the whiz-kid in financial matters, became a Board member. The Registrar of Companies has been alerted on the happenings at the company.
Required:
(a). From the legal perspective, analyse the new arrangement and give reasons if any, why the officers and GreenFuture NGO will be liable.
(b). What are the likely actions to be taken by the Registrar-General in the circumstance of this case?
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- 20 Marks
Identify who is entitled to receive notices of a company's general meeting.
Question
(a). Who is entitled to receive notices of a company’s general meeting?
(b). Under what circumstances will a court order a general meeting to be held?
(c). In a private company, any shareholder can convene an extraordinary general meeting’ Discuss.
(d). Unity Enterprises is to hold its annual general meeting (AGM) at the National Conference Centre soon. Due to a disagreement between the Managing Director (an Economics Professor), and the Board Chairman (a school drop-out who trades at Makola), the new company secretary (a non-lawyer), is uncertain who will determine the agenda for the meeting and also chair the AGM. The secretary has called for your views. Write down your views so you can WhatsApp a snapshot to him.
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- Tags: AGM Chairmanship, Board of Directors, Companies Act, Corporate Governance
- Level: Level 1
- Topic: AGM Chairmanship
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