GHANA Law and Practice Contributed by: Victoria Bright and Justice Oteng, Addison Bright Sloane
conditions, the company is liable to pay an admin - istrative penalty of 150 penalty units to the Registrar. Further, unless a company’s constitution states oth - erwise, members are entitled to vote by proxy. If it is unfeasible to conduct or call a meeting in the man - ner prescribed by the company’s constitution, either a director, member or the Registrar may apply to the court to conduct the meeting in a manner the court Shareholders are also entitled to attend extraordinary general meetings. Extraordinary meetings are con - vened at the board’s discretion, as well as when there are not enough directors within the jurisdiction capa - ble of acting to form a quorum. Unless a company’s constitution states otherwise, these meetings will be held in Ghana. considers fit. Shareholders Regardless of what may be stated in a company’s constitution, on the requisition of two or more mem - bers or a single member holding 10% of shares, a company can convene an extraordinary general meet - ing. Minutes and Electronic Meetings Section 166 of Act 992 provides that the minutes of general meetings shall be recorded in a book reserved specifically for that purpose. Minutes should be signed by the chairperson of the meeting (where a company defaults in this directive, the company and each officer therein is liable to pay the Registrar a penalty of 250 units). A company shall circulate meeting resolutions and supporting circulars to members. The proceedings at these meetings are governed by the Companies Act, 2019 except for those sections in which provisions are made for governance by the company’s constitution. All meetings of the company can be conducted elec - tronically. Similarly, the books and registers subject to inspection can be maintained in either electronic or manual format. The Registrar General has provided guidelines for the conduct of virtual AGMs of compa - nies, of which notice must be submitted to the head office in Accra or any of the regional offices. Notices of such meetings must be sent to every member elec -
tronically in accordance with the provisions of each company’s constitution. 4.4 Shareholder Claims A director’s failure to live up to their responsibilities establishes the basis for claims against them. Exam - ples of bases for claims include the following: • breaching their fiduciary interest; • failing to act in the company’s best interest; • failing 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 can institute legal proceedings against the directors. They can also bring a representative action against the directors or apply for the leave of court to bring a derivative action. 4.5 Shareholders in Publicly Traded Companies Shareholders are not obliged to make general pub - lic disclosures of their holdings. However, they are required by tax laws to make disclosures of their earnings from investments in companies to the Ghana Revenue Authority for taxation purposes. Sharehold - ers typically pay 8% income tax on their dividends. Foreign directors are required to pay this too, unless their country has a dual-tax treaty with Ghana, in which case they may pay a reduced level of income tax. If the shares of a shareholder (or a group there - of) in a publicly traded company amounts to 35% or more of the total shares, they must disclose this to the remaining shareholders. It should also be noted that the names of majority shareholders are usually included in the mandatory publication of the notes to the audited financial statements of public companies. The general threshold is that a person who has direct or indirect interest of 10% or greater in a company must be registered as a beneficial owner. For compa - nies operating in the high-risk sectors, the threshold for reporting beneficial ownership is 5%.
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