- 20 Marks
BCL – L1 – Q83 – Corporate Liability
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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