GHANA Law and Practice Contributed by: Victoria Bright and Justice Oteng, Addison Bright Sloane
providing a false statement to the Registrar of Com - panies is an offence liable to a fine. The enforcer of these sanctions is the Registrar of Companies. 3.9 Other Claims/Enforcement Against Directors/Officers A director’s liability for their actions can be limited to the extent they comply with the company’s constitu - tion and the Companies Act, 2019, and by generally performing their duties to the best of their ability. A director’s failure to live up to their responsibilities may leave them open to legal liabilities. The following are some bases for a directors’ liability: • breaching of fiduciary interest; • failing to act in the company’s best interest; • failure to adhere to the company’s constitution; • acting outside the limits of their power; • making biased decisions; • failing to disclose potential conflicts of interest or placing themselves in potentially conflicting posi - tions without the company’s consent; and • making false declarations to the Registrar General. Subject to the above, shareholders, other directors (via derivative action) or the company itself can insti - tute legal proceedings against directors. 3.10 Payments to Directors/Officers The Companies Act states that fees and any other remuneration payable to the directors shall be deter - mined from time to time by an ordinary resolution of the company and not by any other agreement. Directors are paid their travelling expenses properly incurred from attending board meetings or committee meetings or performing obligations in connection with the company. The registered constitution of a com - pany may provide for the payments of the following to directors: compensation for loss of income as a direc - tor or former director, insurance and other indemnities. In the case of a director losing their office, compensa - tion must first be approved by the shareholders. In the event of a takeover, if a director (who owns shares) is offered a higher price for their shares than other
shareholders, the director must ensure that this fact is included in the notification sent to other shareholders. Finally, compensation for directors is subject to income tax.
4. Shareholders 4.1 Companies and Shareholders
A person who agrees to become a member of a com - pany undertakes to make a contribution to its capital either in kind or in cash. In Ghana, there are four ways of becoming a member of a company: • by subscribing to the documents for the Registrar of Companies; • by agreeing with the company to become a mem - ber; • by transferring shares from another member; or • by operation of law. Act 992 specifies that a shareholder is a member of the company. As a result, shareholders collectively own the company, which confers on them the right to appoint directors. Membership of a company reg - istered with shares continues until a valid transfer of the shares held by the specific member is registered by the company. Shares are transferred by operation of law to another person or forfeited for non-payment of calls, or on the death of a member. Shareholders have the right to attend and vote at AGMs. Subject to the company’s constitution, the right to vote may depend on whether members have paid any sums of money required in respect of the shares allocated to them. Companies are also required to keep a register of members within the jurisdiction; this will be managed by the company secretary and includes the names, addresses and, where relevant, a statement of shares held by each member. Shareholders can act for the company through gen - eral meetings, alongside the board of directors, offic - ers and agents. Notably, unless the constitution of a company provides otherwise, the board of directors is not bound to comply with the directions of the share - holders. Furthermore, shareholders may act in a mat -
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