METHODIST UNIVERSITY COLLEGE GHANA

(ALL RIGHTS RESERVED)

DEPARTMENT OF HUMAN RESOURCE MANAGEMENT& MANAGEMENT
STUDIES
MID SEMESTER EXAMINATION, 2021/2022 ACADEMIC YEAR
BBA/B.Sc/B.A. – LEVEL 300

COURSE CODE: MHRM 303

COURSE TITLE: COMPANY LAW

INSTRUCTIONS TO CANDIDATES

1. Marks to be awarded depend more on the reasoning displayed and the points selected
for discussion than upon the particular conclusion reached;

2. Credit will be given for clarity of expression and orderly presentation of materials.

3. Date for submission; on or before the 10th day of December, 2021 via your class
representative.

QUESTION

Belinda is one of the first directors of A & A Company Limited whose sole business is estate
development and construction. In the constitution of the company a director is required to hold
1,000 ordinary shares to be paid for within two months after incorporation. Belinda did not
fulfill her share qualification within the two months in spite of repeated calls for payment of
the shares by the Company. Belinda continued to carry on her duties as a director though not
meeting the share qualification requirement. Her name appeared on all the letterheads and trade
circulars of the company as a director. She negotiated business for the Company and signed
letters as a director. She acted in various capacities for and on behalf of the Company. Belinda
negotiated and got a secret contract from X & Z Company Limited to build a hospital for it.
She made substantial profit from the contract. A & A Limited got to know of it. A & A Limited
asked Belinda why she did not offer the contract to the company, but privately handled it. Her
answer was that she was neither a director nor a member of the company, so her business affairs
should not be the concern of the company. A & A Limited wish to take legal action against
Belinda. Advice A & A Limited on all the issues raised. [30Marks]