GHANA Law and Practice Contributed by: Victoria Bright and Maxwell Amihere, Addison Bright Sloane
actions done subject to a resolution of the com - pany. To further buttress the elimination of potential conflict areas between the individual interests of directors and the company’s well-being, the law strictly prohibits advancing loans to direc - tors of public companies. The law categorically stipulates: “A public company shall not grant a loan to a person who is a director or a director of an associated company or enter into a guar- antee or provide a security in connection with a loan made to that person by any other person” (Section 328 (1) of Act 992). This restriction is somewhat relaxed for private companies, which only need to specify the fact in the note to the financial statements of the company.
Certainly, the balancing act of managing risk while handling the affairs of a company can be dicey. Consequently, the courts may in given circumstances grant a reprieve. For instance, where a director has acted honestly, then, despite the occurrence of a breach in the execu - tion of their duty, the court may either partially or wholly absolve the director of liability.
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