The issue to be determined is whether Prime Company Ltd. is estopped from denying that Maxwell Mensah held himself out as a director of the Company, even though he was not appointed a director.
For the following reasons, Prime Company Ltd will not be justified in denying Maxwell Mensah as a director of the Company;
i) The Company allowed Maxwell Mensah to transact the fish business with Addae 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.
  ii) The Company allowed Maxwell Mensah to share in its profits.
  iii) 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 directors,……..”
• In compliance with this requirement, the Company printed the names of its directors on all its letter heads and among the directors was Maxwell Mensah.
• It showed that although Maxwell Mensah was never appointed a director, the Company, however, held him out as such.
                                                                                                                                            (3 points for 3 marks each= 9 marks)
  From the above it is to be stated as follows:
• As between outsiders such as Addae Company Ltd. and Prime Company Ltd., the Company was bound by all the acts done by Maxwell Mensah in relation to Addae 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 1& 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 ………. that is to say, persons who might very possibly have been de jure directors”
• In the circumstance of this case, the acts of Maxwell Mensah, though an improper director, were binding on Prime Company Ltd. because no steps were taken by the company to stop Maxwell Mensah 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 Mensah, 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 Prime Company Ltd with Addae 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. Prime Company Ltd will, therefore, not be justified in denying Maxwell Mensah as director of the Company, as the Company itself held Maxwell Mensah out as a director.
                                                                                                                                           (3 points for 3 marks each= 9 marks)
                                                                                                                                       (2 marks for Professional Presentation)

• The terms of a contract are classified as conditions, warranties, or innominate terms. Parties will usually designate which classification a contract term falls. Breach of condition of a contract can constitute a breach of the contract as a whole. This may allow the non-breaching party to sue for damages as well as rescission of the contract.)
• An owner who let out a chattel on hire must take reasonable care to see to it that it was in a reasonably fit for the purpose condition for which the bailee was to use it; the owner would impliedly warrant the suitability of the chattel for that purpose, and was liable to the bailee for breach of the warranty.
• In the instant case, there was indeed a breach of implied warranty, and which would not have resulted in the repudiation of the contract. Therefore, Kojo Atua rightly sued for damages.

• The issue arising in the question is whether the Court rightly awarded the special damages of GH¢ 20,000.00 to Kojo Atua for failure of consideration.
• A claim for money had and received was not maintainable if the contract had been partly performed and some benefit has been derived from the part performance.
• In the present case, the evidence clearly showed that although the tractor was defective and operational at a rate substantially below the declared capacity, it did some work, having hauled a total of 60th logs.
• The Court erred in law in basing the award of the special damages on a total failure of consideration. There was part performance, and for which reason one cannot say that consideration had failed.

• Loss of confidence.
• Delay in completion of audit.
• Lack of infrastructure.
• Inexpertise.
• Negligence.

Audit committees focus on rules and compliance and also to ensure accurate and transparent disclosures. In assisting the board to discharge its responsibility and act with due care, diligence and skill, key functions of the audit committee involve,

• Financial Reporting and Disclosures – The committee must be aware of the financial reporting risks to focus its attention appropriately. This oversight include, reporting of financial information to users of financial reports, application of accounting policies and effective financial management system
• Oversight over System of Internal Control – This includes business policies and practices; protection of company’s assets. Providing assurance and a formal forum for communication between the board of directors and senior financial management on internal control.
• Risk Management System Review– Whilst the company’s system of internal control is designed to help mitigate risk. The audit committee focuses on review of financial reporting, fraud, risk assessment and compliance.
• Culture Compliance – Compliance with applicable laws, regulations, standards and best practice guidelines. The audit committee must recognize how critical the right tone at the top is. The company is required to ensure discipline in the boardroom as well as among employees.
• Oversight of Management and Audit- Facilitating the maintenance of the independence of the external auditor. Facilitating communication between the board of directors and the internal and external auditors; providing a structured reporting line for internal audit and facilitating the independence of the internal auditor (if the entity has an internal audit function). Consideration of significant matters that were raised during the audit process.                                                                                                                                                                                                                                                     (Any 4 points)

i) The Board is dissolved forthwith.
ii) The functions of the Board cease and transfers to the liquidator. The liquidator does not run the company as a going concern.

Liquidation includes both winding up and dissolution. Liquidation is either private/voluntary or official/compulsory. In private/voluntary liquidation which relates to solvent companies, the law applicable is the Companies Act, 1963 ACT 179. In respect of official/compulsory involving insolvent companies, the Bodies Corporate (Official Liquidation Act, 1963 ACT 180) applies. Whether private or official liquidation, a liquidator plays important role in the process of liquidation.

Winding-up refers to the steps taken to have an operating corporate entity cease to be a corporate body. Winding-up includes the appointment of the officer (liquidator) who gathers assets, pays any debts, and distributes any surplus in accordance with law.

Dissolution is the formal pronouncement by the Registrar of Companies that the corporate entity no longer exists and has been struck off the register of companies and the public has been so notified by publication in the Gazette

• Kwame Akoto can seek a court order as a member, or through his appointed director.
• By a petition to the Registrar to hold AGM. Importantly with 15% shareholding he can request extra- ordinary general meeting under section 271 of Act 179.
• Kwame Akoto can seek a court order as a member, or through his appointed director, or by a petition to the Registrar to hold AGM. Importantly, with 15% shareholding, he can request for extra-ordinary general meeting (EGM) under sec 271 of Act 179.
• That the actions of the MD are ultra vires, depending on the allocation of powers among members at general meeting. By the BOD and the MD by the company regulations, Mr Pinkrah alone cannot decide on mergers, class rights, share conversions, business objects etc without the BOD/members at general meetings.
  Breach of other fiduciary duties- e.g. full disclosure and conflict of interest.
• Note that due to Mr. Pinkrah’s 55% shares, AGM and EGM would not amount to much because Mr. Pinkrah cannot be removed as MD/director or his actions declared null and void, reverse the merger etc by resolutions.
• The best choice is to seek remedy against oppression under sec 218 of Act 179, which provides that:
   Where the affairs of the company, or the powers of the MD are being exercised in a manner oppressive to one or more of the members, or in disregard to the interest to their interest as members, officers, debenture holders etc.
   Certain acts taken or threatened, or resolutions passed, proposed unfairly discriminates against and prejudicial to one or more of members or debenture holders.

• Lift the veil for Mr. Pinkrah to be held liable for any fraud
• Civil and criminal liabilities for any breach of fiduciary duties
• If convicted, prohibit him from being a director, promoter, etc of a company
• Secure injunction for illegal or irregular activity-sec 217& 218
• Cancel or vary the merger and other transactions/resolutions
• Regulate the future conduct of the company’s affairs
• Maintain the rights of Kwame Akoto and other members
• Provide for the purchase of the shares of affected members.
• The court can appoint an inspector or order the Registrar to investigate the operations/affairs of the company.

Under Section 2 of the Registration of Business Names Act, 1962 ACT 151 the particulars required to be registered are:

• The business name.
• The general nature of the business.
• The principal place of business.
• Any other places at which the business is carried on.
• The particulars of the proprietor should include;
• The present first name and surname.
• The nationality.
• The nationality of origin of the proprietor.
• The usual residence and other business occupation of the proprietor.
• The date of the commencement of the business.

Advantages of forming a sole proprietorship

• Simplicity, inexpensiveness and ability to legally commence business before the business name registered.
• The proprietor has flexibie working time.
• The proprietor enjoys all the profits..
• ne can purchase or sell a business including its assets such as its inventory, plant machinery and landed property.
  Disadvantages
• Obtaining loans and credit to run the business is more difficult for sole proprietorship.
• The owner’s personal liabilities are not distinct from the business liabilities.
• Sole proprietorships hardly survive the death of the proprietor.
• The health and life of sole proprietorship business is inevitably linked to that of the proprietor.

• Property-The Company can acquire /own property and dispose such property as it wishes.
• Contractual relationship-A company on incorporation, has the capacity to enter into contractual relationship with a natural or legal persons.
• Suing and being sued– A company may sue natural or legal persons for breach of contractual obligations.
• Perpetual succession- A company will continue in existence despite the death of their members.
• Transferability of shares- The shares of a company can be transferred from a member to another person by sale.
• Legal Personality-On incorporation, a company acquires a legal personality.
• Figurative veil– On incorporation, there is the figurative veil, meaning it protects their officers and staff generally from legal risks.