- 20 Marks
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.
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