UNIVERSITY OF THE GAMBIA SCHOOL OF BPA BUINESS LAW

ASSIGNMENT YUSUPHA K. JANNEH

YUSUPHA K. JANNEH Mat#: 21713968

Email: yj21713968@utg.edu.gm COURSE: BUSINESS LAW

LECTURER: MR MANGA

SET: SATURDAY 12:00-2:30

Assignment Question 1

State and explain in detail the lifting the veil of incorporation.

Table of content

1. Introduction
2. Definition of Company
3. Separate Legal Personality

4. Veil of corporation

5. Lifting of Corporate Veil

5.1 Concept of Lifting of Corporate Veil

6. Conclusion

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1. Introduction

Company law has become more applicable and appreciable in the

Gambia particularly due to a recent surge in certain industries in the
business environment that continue to be powerful economic
players.We will consider the limited liability principles, corporate
personality and the unwillingness of the courts to ignore the corporate
veil. Situations in which the courts have had the ability to pierce the
veil of incorporate will be discussed, as well as the reasons why they
have generally upheld their decision.

2. Definition of Company

A company is a legal entity formed by a group of individuals to engage

in and operate a business, commercial or industrial enterprise. A
company may be organized in various ways for tax and financial liability
purposes depending on the corporate law of its jurisdiction.

The line of business the company is in will generally determine which

business structure it chooses such as a partnership, proprietorship, or
corporation. These structures also denote the ownership structure of the
company.

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They can also be distinguished between private and public companies.

Both have different ownership structures, regulations, and financial
reporting requirements.

A Company is defined under S.2 of the Companies Act as a body

corporate incorporated or continued under the companies Act 94.01 Vol.
15 Laws of The Gambia 2009. Pursuant to section 5 of the Companies
Act, a company may be formed by at least two persons or more persons
by complying with the registration requirements of the Act. The
minimum number is two persons and the maximum is fifty in the case of
private companies.

3. Separate Legal Personality of a Company

As soon as a company is incorporated, it becomes a legal personality
separate from its members who formed it. It can therefore own assets,
sue and be sued in its own name etc.

This legal concept that separate legal personality of the Company also
means that in the event of a business failure, the member’s liability is
only limited to the unpaid amount of their share value. This principle
was established in the case of -

SALOMON V SALOMON AND Co Ltd 1897 AC 22

Claimant carried on business manufacturing boots as a sole proprietor.
He later formed a limited liability company together with his family
members, with him taking the majority of the shares. The company was
later wound up and the liquidator claimed that the claimant should bear
responsibility for all the company`s debts.

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The court held that the company and not the claimant owned the
business and the attendant debts. Therefore he had no obligation to pay
the debts.

4. Veil of Incorporation

The term Corporate Veil implies that the law presumes a distinction
between the company and its member. This means that the members of
the company are shielded from public view by the above concept. So
one has to look up to the company for any dealings and claims and not
the individual members.

In LEE v LEE`S FARMING Ltd 1961 AC 12

It was held that Lee, who formed a company in which he was the
beneficial owner of all the shares and was also the “governing director”
was a separate entity from his company and he as governing director,
could on behalf of the company, give orders to himself as servant.

5. Lifting of Corporate veil

Lifting of the corporate veil means disregarding the corporate

personality and looking behind the real person who are in the control of
the company. In other words, where a fraudulent and dishonest use is
made of the legal entity, the individuals concerned will not be allowed to
take shelter behind the corporate personality. In this regards the court

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will break through the corporate shell and apply the principle of what is
known as “lifting or piercing through the corporate veil.”

This separate legal personality of the Company also means that in the
event of a business failure, the member’s liability is only limited to the
unpaid amount of their share value. This principle was established in the
case of - used to commit frauds and improper or illegal acts. Since an
artificial person is not capable of doing anything illegal or fraudulent,
the face of corporate personality might have to be removed to identify
the persons who are really guilty. This is known as ‘lifting of corporate
veil’.

In SINGAM INVESTMENT COMPANY v NASSER H FARAGE

civil Appeal No. 53/99,

It was held that “there is no established check list of guidelines for the
exercise by the Courts of their discretion here. The Courts have
determined each case on its peculiar facts. No general principle can be
advanced which embraces all the cases in which the separate legal entity
principles have been disregarded; they can be seen to be mere examples
of such situations”.

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 There are two existing theories for the lifting of the corporate veil.
The first is the “alter-ego” or other self-theory and the other is the
“instrumentality” theory.

The alter-ego theory considers if there is in distinctive nature of the

boundaries between the corporation and its shareholders.

The instrumentality theory on the other hand examines the use of a

corporation by its owners in ways that benefit the owner rather than the
corporation. It is up to the court to decide on which theory to apply or
make a combination of the two doctrines.

(5.1) Concept of Lifting of Corporate Veil

The corporate veil is a concept which provides that the personality of a

company has to be treated separately from that of its shareholders. It also
protects the shareholders from being held personally liable for the
company’s debts and other obligations. The Cambridge Dictionary
defines corporate veil as the idea that a company’s managers or
shareholders are not legally responsible for the action of the company:
Shareholders may hide behind the corporate veil, assured that their
liability does not extend beyond the value of their shares.

The essential term that needs to be understood for this concept is what a
company means. Section 2(20) of a Company Act, 2013 defines a

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company as a company incorporate under the Companies Act 2013 or

any previous company law. Acompany is a separate legal entity and has
a personality of its own. At many times it happens that the corporate
identity of a company is used to commit some fraud or illegal activity. In
this situation, the concept of the lifting of the corporate veil is initiated.
The corporate of the company is disregarded in order to look out who
were the people involved in that fraudulent act. In simple words, the veil
of separate corporate personality is lifted and the real culprits behind the
veil are held liable, as an exception to the rule of protection under a
corporate shell.

The basic concept of the lifting of the corporate veil can be categorized
broadly under two categories-

(a) Statutory Provision (b) Judicial Interpretations

(a) Statutory Provision: The companies Act, 2013 provides various

provisions which point out the person which should be held liable for the
fraud or illegal activity. The act states that these people (directors or key
managerial positions) are to be referred to as ‘officer who is in default’.

(b) Judicial Interpretations: Besides Statutory provisions, the judiciary

has played an important role in lifting the corporate veil as well.
Judiciary is empowered to lift the corporate veil if the conduct of a
company is in conflict with the public interest.

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6. Conclusion

Many individuals try to misuse their power under the corporate shall
for their own benefits as they are protected under the corporate veil.
But the concept of the lifting of the corporate veil is a powerful
weapon in the hands of the judiciary. It makes sure that no individual
gets to perform illegal acts under the company name and walk free.
Its acts as a watchdog over companies. The personality of a company
is surely separate from that of the shareholders of the company, but
this doesn’t mean that the shareholders can do wrong hiding behind
the corporate veil.

References-

 Companies Act, 2013

 # Pickering, "The Company as a Separate Legal Entity" (1968)
31 M.L.R. 481, 48
 Schmitthoff, "Salomon in the Shadow", [1976] J.B.L. 305, 305-
312;
 Robert B. Thompson, Piercing the Corporate Veil: Is the
Common Law the Problem? 37 CONN. L. REV. 619, 622
(2005).

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Business Law: Assignment Question 2

State and explain in detail the various subordinate and

superior courts and their jurisdiction in The Gambia.

Table of content

1. Introduction
2. The structure of the court system
2.1 The superior courts comprise
2.2 The subordinate courts comprise
3. The role of court in the legal system
4. The structure of the legal profession
5. Conclusion

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1. Introduction

The Gambia implements a tripartite legal system based on English

common law, Sharia (Islamic) law, and customary law.Common law and
principles of equity, customary law as it concerns the communities to
which it applies, and Sharia law on matters of marriage, divorce and
inheritance among people of Islamic faith.

2. The Structure of the Court System

The court structure in The Gambia operates at two levels: namely, the
superior and subordinate courts.Superior courts which comprise
Supreme Court, Gambia Court of Appeal, High Court, Special Criminal
Court and the Subordinate courts which consists Magistrates Court,
District Tribunals, Cadi Courts and such lower courts or tribunals that
may be established by an Act of Assembly.  The Courts in Gambia is
also divided by their jurisdiction. Apart from the High Court and the
Special Criminal Court, the superior courts are largely vested with
Appellate Jurisdiction and a limited exclusive original jurisdiction. For
instance, the Supreme Court has the jurisdiction to hear and determine
appeals from the Court of Appeal on all matters, but the Supreme Court
does not have original jurisdiction over criminal matters, nor does it
have original jurisdiction over the interpretation and enforcement of

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fundamental rights and freedom. The Courts, which have the jurisdiction
to hear matters at first instance, are listed below:

 High Court
 Special Criminal Court (Power to hear and determine all criminal
offences of theft relating to public property and public funds)
 Magistrates Court
 District Tribunals
 Cadi Courts (Jurisdiction to apply Islamic law in matters of
marriage, divorce and inheritance)
 One striking feature of the High Court, apart from its appellate
jurisdiction to hear appeals from the lower courts, is its supervisory
jurisdiction over all lower courts to make orders, issue directions
and write orders of legal proceeding, mandamus, certiorari and
prohibition.
 The Courts and other adjudicatory bodies constitute the judicature
comprises the superior courts of record, and the subordinate courts,
(2.1) The superior courts comprise:
(a)the Supreme Court
(b) the Gambia Court of Appeal
(c)the High Court and Special Criminal Court
(2.2) The subordinate courts comprise:
(a) Magistrates’ Courts

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(b) Children’s Courts

(c) District Tribunals
(d) Industrial Tribunals
(e) Rent Tribunals
(f) Cadi Court
(g) Anti-littering Court

3. THE ROLE OF COURTS IN THE LEGAL SYSTEM

The Courts play an important role in the functioning of a Country’s

Legal System. A court is any person or institution, often as a
government institution, with the authority to adjudicate legal disputes
between parties and carry out the admiration of justice in civil, criminal,
and administrative matters in accordance with the rule of law. The
Courts deliver the primary role of enforcing the law. In the Common
law tradition, it is the bearer or guardian of the law.

It is the main forum for the resolution of disputes between individuals

and between the State or its agencies and private persons or individuals.
Historically, in the common law tradition and our indigenous customary
law its nature and role is fundamentally adjudicatory. This inherent
character of its nature and role is emphasized by the 1997 Constitution
like the previous Constitutions. So the Courts are established, primarily
to determine the legality of acts and omissions of individual persons,

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corporate persons and the state and its agencies in disputes brought
before the Court. In this regard it determines criminal trials and the
existence or extent of any civil right or obligation.

The Courts ensure the legitimate and lawful exercise of power thereby
helping the law realize its dual role as a means of governance and of
shaping the behavior of citizens on one land and as a protection from the
arbitrary use of power by others (whether state or individuals).

This dominant role of the Courts in law enforcement has influenced

some jurists in defining law in terms of the principles and processes
evolved by the Courts in the determination of disputes.

 The courts and other adjudicatory bodies constitute the judicature

of the Gambia as provided for in chapter Vii of the 1997
constitution of the Gambia. They are listed in S.120(1) therein as
follows:
The Supreme Court: This is the highest court in the Gambia.
Before 1997 Constituted by a single Judge with three judges
presiding in treason trials. The supreme court of the Gambia is
established in 1851, it has appellate and the original jurisdiction
over any law exceeding the powers conferred by the constitution or
any law upon the national assembly or any authority. The
Supreme Court has exclusive original jurisdiction for the

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interpretation or enforcement of any provision of the 1997

Constitution other than sections 18 to 33 or section 36(5) which
relate to fundamental human rights and freedoms. This means the
Supreme Court can entertain matters arising from all provisions
in the 1997 Constitution except for those involving civil liberties.

Original jurisdiction: The original jurisdiction of the court is set

out in section 127 of the constitution. it lies with the interpretation
or enforcement of any provision of the constitution, besides section
18 to 33 and section36(5); on any question of whether law was
made in excess of the power conferred by the constitution or in
other status; on any question whether the person was validly
elected to the presidency(section 49)or the national assembly ;or
on any question of whether the content of an official document
should be produced in court proceedings if the national security
issues are at stake.

The Supreme Court has appellate jurisdiction in cases from a

variety of sources, and this is set out in Section 128 of the
Constitution. These include appeals from the Court of Appeal in
any civil or criminal case or matter from a judgment in the High
Court that was in the exercise of its original jurisdiction; an appeal
from the Court of Appeal that dismissed an appeal from a death
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sentence imposed by another court; or in any such case as

prescribed by an act of the National Assembly. An appeal may also
reach the Supreme Court from the Court of Appeal if that court is
satisfied that the case involves a substantial question of law or it is
in the public interest that the matter be heard by the Supreme
Court.
The court of appeal: The court of appeal of the Gambia Is
presided by the president of the court of appeal and is constituted
by three (3) judges. The court hears appeals from the high court.
The high court is established by S.131 (1) of the 1997constitution
of the Gambia. The President of the Court of Appeal may, in
consultation with the Chief justice, establish such divisions of the
Court of Appeal as he or she thinks fit to sit at such places. In The
Gambia as he or she may determine. The Court of Appeal shall
have jurisdiction to hear and determine appeals from judgments,
decrees and orders of the High Court and such other appellate
jurisdiction as may be conferred on it by an Act of the National
Assembly. The Court of Appeal also has jurisdiction to hear
appeals from Court Marshals. (constitution the Gambia,1997,
chap vii, pat2.p74 ) 2
The High Court: Apart from matters falling with the exclusive
original jurisdiction of the Supreme Court as stated in section 127,
the High Court has original jurisdiction to hear and
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determine all civil and criminal cases. As the Supreme Court is

exempt to interpret and enforce the fundamental rights and
freedoms as provided in sections 18 to 33 and 36(5), the High
Court has original jurisdiction to hear and determine the aforesaid
provisions of the Constitution. The High Court also exercises
supervisory jurisdiction over all lower courts such as the
Magistrates’ Courts, Cadi Courts and other adjudicatory authorities
in The Gambia. In exercise of its jurisdiction, it shall have power
to issue directions, orders or writs, including writs of
habeas corpus, orders of certiorari, mandamus and Prohibitions as
it may consider appropriate for the purpose of exercising its
supervisory powers.
Magistrates Courts: are courts which are under the authority or
control of another court or lower in position by law.…” The courts
were first established in the city of Banjul and in every division of
the Gambia by S.14[1] of the courts act as a court subordinate to
the high court’s act gives the chief justice the power with the
concurrence of the president, to establish other subordinate courts
to exercise jurisdiction in the Gambia”( Manga, the Gambia legal
syetem,p.15 to 16,2020) Subordinate courts have jurisdiction over
criminal and civil matters. They are supervised by the High Court.
In civil matters, their jurisdiction is one million dalasi’s and
below.
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The Cadi Courts: These courts are presided over by a local chief
and a council of elders who profess the Islamic religion and have
knowledge over Islamic law. These courts have limited jurisdiction
as opposed to other lower courts as their scope is only limited to
matters of marriage, divorce and inheritance for interested
parties who are Muslims. Dissatisfied litigants can appeal to the
Cadi Appeals panel.
District tribunals: District Tribunals are the most basic and
fundamental Courts in our pyramid of judicial hierarchy. They are
located amongst the people” (, the GaMangambia legal syetem,
2020, p2). Tribunals serve as appeals courts in cases of tribal law
and custom. Cases of first instance in criminal and civil matters are
handled by administrative officers who function as magistrates in
courts located in each of the five administrative regions and
Banjul. Tribunals are specialist judicial bodies which decide
disputes in a particular area of law. The focus of the tribunal is on
claims about smaller amounts of money or property. The Tribunal
is governed by the Disputes Tribunal Act 1988. Unlike the
ordinary courts, the District Tribunal is inexpensive, flexible,
quick, informal and private. There are no lawyers or judges in the
Disputes Tribunal. Most of the people in the Gambia depend on
district tribunals for justice. They have territorial jurisdiction
which is restricted to towns and villages and personal jurisdiction
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which says the district tribunals can only exercise jurisdiction over
a person resident or being within the area of the jurisdiction of the
tribunal.

4. The Structure of the Legal Profession

The legal profession comprises legal practitioners enrolled to practice

law by the General Legal Council established under the Legal
Practitioners Act (Cap. 7:01), and the common law judges who preside
in the High Court, Court of Appeal, Supreme Court, Court Martial and
the Magistrates’ Courts. In its wider sense the legal profession could be
regarded as including the Cadis trained in Islamic law, who preside over
the Cadi Courts, and Sharia practitioners (persons qualified in Sharia law
permitted to represent litigants before the Cadi Court).

The legal profession is fused, such that there is no distinction between

barristers and solicitors. Persons trained as barristers and solicitors
anywhere in the Commonwealth may be enrolled to practice as legal
practitioners if they meet the requirements specified in the Legal
Practitioners Act and fulfill the conditions prescribed by the General
Legal Council established under that Act. These include being a citizen
of the Gambia (or non-citizen who has been resident for a period of not
less than 15 years), having a law degree and a professional qualification
which permits the applicant to practice law anywhere in the

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Commonwealth, having no criminal record, and character references

from two current members of the Bar.

By section 33 of the District Tribunals Act, lawyers have no rights of

audience before District Tribunals. The rationale for this may be because
common law based rules of evidence or rules of civil procedure do not
include customary law. Only lawyers who are qualified in Sharia law
may appear before the Cadi Courts.

5. Conclusion

The judicial is the third branch of government responsible for the

interpretation of the law. The system needs to make more independence,
accountable and able to deliver justice effectively and efficiently. The
independence of the judiciary from the executive is essential to freedom.
If the executive could have unfettered control over the appointment,
promotion and dismissal of members of the judiciary, it would be the
unlimited master of the state. Judicial independence is best maintained
by its formal constitutional entrenchment backed up by a commitment
by all state organs to respect the rule of law and accord such assistance
as the courts might require protecting their independence, dignity and
effectiveness. The Gambia courts can ensure democratic accountability
by enforcing separation of powers within the branches of government.

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As well as, develop and protect core human right thereby enhancing
accountability between the citizenry and the government.

References-

 Gambia Legal System by Emmanuel Akomaye Agim, ORG

 Consolidated Laws of the Gambia
 Islamic Family Law: Gambia
 The Law Hub Gambia :
 World Legal Materials from Africa: Gambia

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