Business formation

BCL – L1 – Q64 – Partnership formation

Analyze issues in a partnership agreement and list items to verify for a valid partnership involving an employee and family members.

Question

KOFI

Kofi was employed as a senior wholesale manager by AB Limited, a limited liability company owned 100% by Mr. Adu. Kofi’s monthly salary is $30,000 and has been so for the last five years. To prevent Kofi from leaving the company, Mr. Adu went into agreement with him whereby AB Limited, Kofi and twenty family members of Mr. Adu formed a partnership. Kofi will get $40,000 as monthly salary and 10% of gross profit as bonus as and when Mr. Adu deem it fit. Kofi must give six months’ notice for resignation but could be fired without notice by Mr. Adu. Kofi has no role in management, control or in carrying out the partnership business. Kofi is happy with his new salary but thinks all is not right.

(a) What is not right?

(b) State five other items Kofi must verify in a partnership agreement.

Answer

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Tags: Business formation, Business law, Corporate Governance, Fiduciary duty, Ghana company law, Legal entity, Partnership agreement, Partnership dissolution, Partnership liabilities, Profit sharing
Level: Level 1

Topic: Alternative forms and constitutions of business organisations

BCL – L1 – Q63 – Pre-incorporation contracts

Advise on company registration refusal, corporate veil lifting, and pre-incorporation contract issues for a company formed in Ghana.

Question

LINA

(a) Under what circumstances will the Registrar refuse to register constitution of a Company?

(6 marks)

(b) Explain the circumstances under which the corporate veil could be lifted or pierced.

(c) Lina lives in the United Kingdom (UK) and asked her long-time friend, Esi to register a company for her in Ghana. Esi spent $10,000 on documentation, filling and processing, (with the issuance of receipts being Esi’s name) all covered with receipts in her name. Upon the request of Lina, Esi rented an office premises for one year at GH₵20,000 with the receipt in the name of the newly formed company. Lina just returned from UK to start operations. Lina discovered that the rental agent gave GH₵2,000 to Esi as inducement for the office deal. Lina appointed Esi as head of operations and refused to pay the registration expenses on the basis that Esi’s monthly salary as head of operations is more than GH₵10,000 and those expenses should be borne from the secret profits Esi had earlier enjoyed.

Required:

Based on your knowledge in pre-incorporation contracts, advise the parties.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business formation, Company registration, Corporate Governance, Corporate veil, Fiduciary duty, Ghana company law, Legal entity, Partnership liabilities, Pre-incorporation contracts, Secret profits
Level: Level 1

Topic: Alternative forms and constitutions of business organisations

BCL – L1 – Q59 – Alternative forms and constitutions of business organisations

Advise Ama, Dela, John, and Mr. Addo on forming a consultancy partnership, considering capital contributions and partner eligibility.

Question

Ama, Dela, and John were classmates from ICAG 2014 batch of graduates. They intend to form a consultancy firm/partnership in the future by pooling resources together. Ama’s 2005 Toyota Siena estimated at GH¢40,000 will be her initial capital contribution towards the formation of the partnership. However, the car is currently registered in the name of her father, Mr. Addo, a 59-year-old Chief Accountant for Zenith Energy Limited, who desires to be part of the daughter’s business upon retirement and will not let go of title to the car without any benefit. Dela and John, who are contributing GH¢30,000 each of the initial capital, are opposed to any ‘old-school’ accountant being part of their partnership.

You are the most-rated business law student. Advise the parties.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business formation, Capital contribution, Legal advice, Partnership, Partnership agreement
Level: Level 1

Topic: Alternative forms and constitutions of business organisations

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BCL – L1 – Q64 – Partnership formation

Analyze issues in a partnership agreement and list items to verify for a valid partnership involving an employee and family members.

BCL – L1 – Q63 – Pre-incorporation contracts

Advise on company registration refusal, corporate veil lifting, and pre-incorporation contract issues for a company formed in Ghana.

BCL – L1 – Q59 – Alternative forms and constitutions of business organisations

Advise Ama, Dela, John, and Mr. Addo on forming a consultancy partnership, considering capital contributions and partner eligibility.

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BCL – L1 – Q64 – Partnership formation

Analyze issues in a partnership agreement and list items to verify for a valid partnership involving an employee and family members.

You're reporting an error for "BCL – L1 – Q64 – Partnership formation"

BCL – L1 – Q63 – Pre-incorporation contracts

Advise on company registration refusal, corporate veil lifting, and pre-incorporation contract issues for a company formed in Ghana.

You're reporting an error for "BCL – L1 – Q63 – Pre-incorporation contracts"

BCL – L1 – Q59 – Alternative forms and constitutions of business organisations

Advise Ama, Dela, John, and Mr. Addo on forming a consultancy partnership, considering capital contributions and partner eligibility.

You're reporting an error for "BCL – L1 – Q59 – Alternative forms and constitutions of business organisations"

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