• The Constitution
• Enactments made by or under the authority of Parliament
• Any orders, rules, regulations made by any person or authority under a power conferred by the Constitution (delegated legislation: constitutional instruments, legislative instruments and executive instrument )
• the existing law.
• The common law (doctrine of equity, and the rules of customary law, including those determined by the Superior courts)
• Judicial precedent
• Statutory interpretation
                                                                                                                                                                                  (Any 5 points)

The financial statements are normally prepared on the assumption that an entity is a going concern and will continue in operation for the foreseeable future. Hence, it is assumed that the entity has neither the intention nor the need to liquidate or curtail materially the scale of its operations.

The main significance of the going concern concept is that the assets should not be valued at their ‘break-up’ value (the amount they would sell for if they were sold off piecemeal and the business were broken up).

The interest of partners in the partnership property and their right and duties in relation to the partnership shall be determined subject to any agreement or implied between the partners. In the absence of expressed agreement:
i) All partners are deem to be entitled to share equally in the capital and profit of the business and must contribute equally towards the losses whether of capital or otherwise sustained by the firm.
ii) The firm must indemnify every partner in respect of payments made and personal liabilities incurred by the firm.
iii) A partner making for the purpose of the partnership any actual payment or advance beyond the amount of capital which he has agreed to subscribe, is entitled to interest at the rate of 5% percent per annum from the date of the payment or advance.

Partners are advised to set out their intention in a Partnership Agreement or Deed of Partnership. The Agreement should cover matters such as:
i) Profit sharing based on their individual contribution
ii) Capital contribution(500,000:1,500) based on the initial contribution taking into account of initial contribution vis-a vis the bank loan
iii) Management- this should be done together
iv) Liability sharing (500,000:1,500)- same as the capital sharing agreement/contribution
Until this period, there was no agreement so profit sharing should be 50-50. However going forward the partners should consider entering into the agreement with the above notes as guide

Powers normally held by all partners:
i) To sell goods or personal chattel of the firm
ii) To purchase an account of the firm goods or necessary usually employed in the business
iii) To employ employees for business
iv) To engage a solicitor to defend the firm
v) To issue, accept, transfer and endorse bill of exchange either by signing the firms name or the partners own name for and on behalf of the firm.
vi) To borrow money on credit for the firm, regardless of any limitations of authority agreed between the parties.
vii) To secure a loan by pledging personal property of the firm or by depositing title deeds.
viii) To admit a partner into the firm
ix) To make donation to charity or for a reputable cause. etc
x) Request for additional capital notices
                                                                                                                                                                  (1.5 for each point raised)

An ultra vires contract is a contract entered into by a company in excess of its objectives as contained in its regulations;
Or in excess of its powers as contained in the Regulations or the Company’s Act;
Or a contract entered into by the directors of the company in excess of their powers as contained in the regulations or the Acts.
                                                                                                                                                                                             (3 Marks)
An ultra vires act can be ratified by members of the company or the directors.
                                                                                                                                                                                             (2 Marks)

i) Duty to vest in the liquidator by notice in the Gazette that all properties of the company shall vest in him.
ii) Duty to sell the assets so that the monies so realized could be used for distribution to creditors.
iii) Duty to verify debts by meeting with creditors to proof their claim.
iv) Duty to amend or alter claim or rectify admitted values or amount.
v) Determine the priority of debt so the most priority debts are settled first.
vi) Duty to consult creditors and members to discuss relevant matters.

                                                                                                                                                    (3 Marks each for any five points)

A member of a company is any person who has subscribed to the regulations of the company and has his name entered into the register of the company.
Any shareholder of the company who owns at least one share in the company.

Prohibited transactions in share are
i) Alteration of the number of shares or the amount remaining payable thereon. This is to make sure that all shares are paid for and it corresponds to the accounting value or the share portfolio.
ii) Release of any shareholder or former shareholder from his liability on the share. Should this be done it will diminished the capital of the company.
iii) The provision of any financial assistance, directly or indirectly for the subscription or purchase of the company share on the shares of a holding company. This will give a misleading picture of the company to outsiders.
iv) The acquisition by way of purchase or otherwise of any of its issued shares or any share of its holding company this with amount to inside trading.

With the ‘Veil of Incorporation’, the company is separate from its members, such that, although the corporate veil principle is regarded as fundamental to company law, there are instances where it has been lifted or ignored in favor of the economic realities of the situation.
This occurs where the Courts are prepared to take judicial notice of the identities of the owners, directors or controllers with a view of fixing them with some legal liability. The reasons the Court give for lifting the veil may be several but notable among them are;
i) Agency principle
ii) Fraud principle
iii) Capital flight
iv) Public policy
v) Facade principle/ Evasion of contractual obligation
vi) Statutory provisions
Examples of statutory provisions are
a) Failure to publish annual returns
b) Operating with less than two directors
c) No membership ( a company without any member)
d) Failure to display the company’s name