- 9 Marks
Question
Explain THREE (3) main effects of incorporation of a company under the Companies Act 1963 (Act 179).
(9 marks)
Answer
- Contract under seal between Company, Members, and its Officers: When the Regulations are registered, they become a binding contract between the company, its members, and its officers.
- Perpetual Succession: The company continues to exist regardless of changes in membership or ownership.
- Separate Legal Status: The company becomes a separate legal entity, capable of suing and being sued, independent of its members.
- Legal Person: Upon incorporation, the company is recognized as a legal person, distinct from its shareholders, with the ability to own property, enter into contracts, and conduct business. (3 points @ 3 marks each = 9 marks)
- Tags: Company Incorporation, Company Law, Corporate Identity, Legal Effects
- Level: Level 1
- Topic: Types of capital and the financing of companies
- Series: NOV 2018
- Uploader: Dotse