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- 10 Marks
Question
Lucy Kondomire and Adele Amaney have been engaged in the formation of a private company limited by shares to engage in a curtain business. They are very eager to win a contract to supply the new Parliament House with 3,000 yards of curtains as part of a planned refurbishment of the Chamber of Parliament. They are optimistic of being awarded the contract in view of the President’s campaign to promote locally produced and manufactured goods. They have already proposed the name of the company to be “Nyamenehene Curtains Plaza.” The company is to be registered with 1,000,000 ordinary shares of no-par value and fully subscribed 600,000 and 400,000 shares respectively. In view of this, they have approached you as a Consultant to take over the process of incorporating their company as quickly as possible to enable them to win the contract. They have expressed their desire to pay any fee possible if the process is completed within five days.
Required:
i) State EIGHT (8) requirements for the incorporation of a company to Lucy Kondomire and Adele Amaney. (6 marks)
ii) If it turned out later that Adele Amaney did not pay fully for the shares she subscribed to, and have not been issued with a share certificate, what would be the implication of this occurrence? (4 marks)
Answer
i) Requirements for Incorporation:
Section 13 of the Companies Act, 2019 (Act 992) outlines the requirements for incorporating a company in Ghana. The eight key requirements include:
- Company Name: The name of the company as proposed (e.g., “Nyamenehene Curtains Plaza”).
- Type of Company: Indication of the type of company (e.g., private company limited by shares).
- Nature of Business: The nature of the proposed business (e.g., curtain manufacturing and supply).
- Registered Office: Address of the proposed registered office and principal place of business in Ghana.
- Details of Subscribers: Particulars of each subscriber, including full name, date and place of birth, residential address, occupation, and nationality.
- Details of Directors: Particulars of each proposed director, including full name, former names, residential address, occupation, and other directorships held.
- Statutory Declaration: A statutory declaration by each proposed director indicating that they have not been convicted of fraud or dishonesty, and have not been declared insolvent.
- Shareholding: The amount of proposed stated capital, number of authorized shares, and subscription details (e.g., 1,000,000 ordinary shares with 600,000 and 400,000 shares fully subscribed).
ii) Implications of Unpaid Shares:
If Adele Amaney did not fully pay for the shares she subscribed to and has not been issued with a share certificate, she would not have the status of a shareholder/member. This would imply that she does not have the rights associated with shareholding, such as voting rights, entitlement to dividends, or the ability to transfer shares. Furthermore, she may not be recognized as a legal member of the company until full payment is made and the share certificate is issued. This could affect her ability to influence company decisions and participate in the company’s management.
- Tags: Business Formation, Company Incorporation, Corporate Law, Shareholding
- Level: Level 1
- Uploader: Dotse