ORGANS OF THE

COMPANY:
Officers, Auditors, Secretary,
Receiver
Officers
• We have mentioned severally that while an artificial legal person,
a company must act through natural persons. As such companies
use “officers” to transact their business.

• The term “officers” refers to persons who are appointed or

regularly employed as part of their business in conducting the
company’s affairs.

• Officers usually include:

• Directors,
• Managing Directors,
• Managers,
• The Secretary,
• Solicitor when remunerated by a fixed salary as opposed to be
retained in the regular way (as an outside counsel),
• Persons whose duty it is to invest monies of the company and hold
the investment, and
• A liquidator
• Excluded are trustees of the company, trustees of a debenture holder,
bankers, experts employed to investigate the management of the
company.

• Per sec 2 of the first schedule of the code, “officer” in relation to any
body corporate means:
i. director;
ii. secretary or employee of that body corporate;
iii. a receiver and manager of any part of the undertaking of that body
corporate appointed under a power contained in any instrument, and
iv. any liquidator of a company (what is the difference between a receiver and a liquidator?). Receiver main
duty is to secured creditors but Liquidator is concerned with all the affairs of a company and all of its creditors whether secured or
not.

• But an “officer” does not include:

i. Any receiver, who is not a manager;
ii. Any receiver and manager appointed by court
iii. Any liquidator appointed under the provisions of the Companies
(Liquidation) Act; or
iv. Any auditor of the company
• Section 216 of the Act provides that

“the rights, duties and liabilities of officers and agents of companies shall
continue to be governed by the rules of the common law and equity relating
to principal and agent and master and servant save in so far as such rules are
inconsistent with the express provisions of the Act.”

• Officers are usually appointed and their remuneration is fixed by

the board of directors.

• However, the Regulations of the company may provide that the

appointment and remuneration of officers or any one of them
may be fixed at a General Meeting.

• Failing an agreement on the remuneration of officers, they are

entitled to bring an action for Quantum Meirut (remuneration
for the work done in fact) but they have no lien rights on the
properties of the company for monies due them.
Secretary
Appointment
• The secretary is usually appointed by the board of directors – sec
190(3) and the board sets the terms and conditions of employment.

• However, the Regulations may vest the appointment of the secretary in

the members or in any other person.

• Sometimes, a director may also act as a secretary of the company.

However, where something is to be done by both a director and
secretary, one person acting in both capacities cannot do it.

• The Secretary may also be a company. Usually public companies

appoint companies that are their registration agents or transfer
agents to be their secretary.

• If for any reason, there is a vacancy in the office of secretary, the

duties of a secretary may be performed by a deputy secretary or any
officer appointed by the board to be acting secretary.
• Every company is required to have a secretary. If a company carries on
business for more than 6 months without a secretary, the company and every
officer in default shall be liable to pay a fine per day of that the default
continues (lifting the veil?).

Status of the Secretary

• The secretary is an officer of the company. And the role/status of the secretary
is administrative – assisting the board of directors.

• The secretary is therefore an agent of the company and owes all the fiduciary
duties of an agent to a principal.

• As an administrative assistant and officer of the company, the secretary cannot

without the directors’ consent by way of resolution:
1. make commercial decisions for the company;
2. Borrow funds in the company’s name;
3. Conclude contracts on behalf of the company
4. Call meetings; or
5. Commence legal proceedings on behalf of the company.
Capacity to bind the company
• As an officer of the company, the secretary’s acts are not binding
on the company unless:
1. The company through its members in general meeting, board of
directors, or managing director, shall have expressly or impliedly
authorised the secretary or agent to act in the matter;

2. the company through the above mentioned organs have

represented him as having authority to act in the matter;

3. His acts are within acts customarily performed by Secretaries (i.e.

administrative matters). In Panorama Developments (Guilford) Ltd v. Fidelis Furnishing Fabrics
Ltd, the secretary of the defendant company perpetuated fraud on when he hired cars from the plaintiff
ostensibly for the company's business but in fact for his private business. The contracts were signed by the
secretary. The plaintiff sued the company for the payment of the hire charges but the company sought to
deny liability arguing that a secretary was a mere servant who could only do what he was told and that no one
could assume that the company secretary had any authority to represent anything at all.
Held: In summary, it was held that the company secretary has authority to enter to sign a contract connected
with the administrative side of the company’s affairs, such as employing staff and ordering cars, and so forth . Such
matters come within the ostensible authority of a company secretary.
The company secretary and the board of directors
• In the main, the duty of the company secretary is to help the directors to
discharge their duty.

• In this capacity, the company secretary makes arrangements for board meetings,
and when requisitioned by a member of the board, he shall summon a meeting.

• The secretary also sends out notices of meetings and agenda, prepares the
chairman’s agenda, takes down minutes of meetings and keeps copies of minutes
in the Minutes Book of Directors.

• Several corporate documents including the annual returns are co-signed by the
director and the secretary.

• As and when required, the secretary gives notice to any director that his liability
is to be unlimited.

• He also ensures that directors provide the necessary particulars to complete

various registers and other documents involving the directors.
The company secretary and members
• The company secretary sets in motion the machinery to convene the general meetings
of members and the circulation of various statutory documents ( notices of meeting,
agenda, proxy notices etc. unless this duty is contracted out to registration officers
• The company secretary has responsibility for the issuance of share certificates unless he
the job is contracted out to registration officers.

The Company secretary and the Registrar

• Before a company commences business, it is required to file a return in duplicate
containing various particulars with the Registrar. This return shall be signed by 2
directors and the company secretary.

• Similarly, before a company commences business, it shall meet the minimum capital
requirement and shall make a statutory declaration in this regard. The statutory
declaration shall be signed by all the directors and the company secretary.
• He also attends to delivering to the registrar all relevant documents required to be filed.

The company secretary as records and seal keeper

• He is the custodian of the company’s documents and seal.

• He allows inspection by members or other interested parties of the various registers and
documents that are required to be kept by the company.
• Where a document is required but the document is of such a nature that only a
copy can be submitted, the CS ensures that the copy is sent within 10 days.

• As records and seal keeper, the CS authenticates documents of the company by

issuing certified true copies, notarial copies or sealed instruments of the
company.

The company secretary and creditors

• A debenture is a written acknowledgment of indebtedness by the company
setting out the terms and conditions of the loan.
• Being a document of the company, its drafting may very well be done by the secretary
of the company.

• The Act also requires that a register of debenture holders is kept and that
particulars of charges created by companies be registered with the Registrar. The
Company Secretary may be the officer to attend to these matters on behalf of the
company.

• In the case of voluntary winding up, the company secretary assists the directors
in making the affidavit of solvency at least 5 weeks prior to the passing of the
resolution calling for the voluntary winding up of the company.
The company secretary as administrative officer
• This is the omnibus responsibility of the company secretary. He
performs the duties delegated or assigned to him by the directors

• He conducts correspondence, e.g. with the company’s lawyers or

accountants or auditors or insurers

• He also negotiates and concludes contracts regarding

administrative matters on behalf of the company

• He may draft contracts and other documents o n behalf of the

company

• He may issue certificate of shares and debentures.

• May also draw cheques on the company’s bank account.

Register of Directors and secretary
• In furtherance of the objective of securing transparency and accessibility, the Act
requires companies to maintain a register containing particulars of directors and
secretaries.

• With respect to each director, the register must contain the following particulars:
• Present forenames and surnames;
• Any former names;
• Usual residential address;
• Business occupation
• Particulars of any other directorships other than the alternate directorships
held.
• If the secretary is an individual, the register must contain the following
information:
• Present forenames and surnames;
• Any former names;
• Usual residential address
• Business occupation
• If the secretary is a company, the register must contain its corporate name and the
registered or principal office.

• If the secretary is a partnership, when all partners in the firm are joint secretaries, the
name and principal office of the firm may be stated in the register instead of the
residential address of each partner.

• The register of directors and secretary is required to be available for inspection by the
public. And should be opened for inspection each day excluding Saturday and Sunday
and public holidays

• The register must be kept at the registered place of business of the company.

• Members of the company may inspect the register without charge. Other persons may
inspect the register by paying the prescribed fee.
The Auditor
• The auditor is not an officer of the company. However, he stands in a fiduciary relationship to the
members of the company as a whole

• The auditor shall act in a faithful, diligent, and careful and ordinarily skilful manner consistent with
the standards of his profession in the circumstances.

• The auditor shall be liable for any professional negligence

• No regulations, contract or resolution of the company can relieve the auditor of his duty to maintain
appropriate professional standard or relieve him from liability as a result of the breach of these
standards

Rights, duties and powers

• Right of access at all times to the books, accounts and vouchers of the company and to require from
the officers of the company such information and explanation deemed necessary.
• Right to attend any general meeting of the company and to receive notices of and other
communication relating to any general meeting
• Right to be heard any general meeting on any business of the meeting which concerns the auditors
work
• Right to apply to court for direction in any matter arising in connection with the performance of his
functions.
• Before one accepts appointment as an auditor of a company he shall communicate with the retiring
auditor of the company, if any to invite representations and supply of information about the company
• Pursuant to any contract with the company, the auditor may expressly or impliedly undertake
obligations to the company in relation to the detection or defalcation and advise of accounting costing
and taxation raising of finance and other matters.
• In preparing their reports, there are certain matters mandated by the 5 th schedule of the
code to be addressed by auditors. These are:
1. Whether they have obtained all the information and explanation which to the
best their knowledge and belief were necessary for the purpose of their audit;

2. Whether in their opinion proper books of account have been kept by the
company, so far as appears from their examination of those books, and proper
returns adequate for the purposes of their audit have been received from
branches not visited by them.

3. Whether the company’s balance sheet and P&L account accord with the books of
account of the company

4. Whether in their opinion and to the best of their information and according to
the explanations given them, the said accounts give all the information required
by the Act and give a true and fair view:
1. In the case of the balance sheet, of the state of the company’s affairs at the end of its
financial year; and
2. In the case of the P&L account of the profit and loss of each financial year, or as the case
may be give a true and fair view thereof subject to the non-disclosure of any matters to
be indicated in the report.
Qualification
• The same qualifications apply to auditors of private and public companies save for 1
difference:

• Firstly, for private companies, a person may be an auditor who is not a member of the
Institute of Chartered Accounts of Ghana but is a practising accountant within the meaning
of the Chartered Accountant’s Act. For public companies, one must be a presently qualified
chartered accountant and a member of the Ghana Institute of Chartered Accountants in
good standing.

• Apart from this difference, the following qualifications apply to both auditors of private and
public companies:
1. Member of the Institute of Chartered Accountants (Ghana) or, in the case of a private company, a
practising accountant within the meaning of the Chartered Accountants Act. (Act 170);
2. Not an officer of the company or any associated company
3. Not a partner or in the employment of an officer of the company or of any associated company
4. Not an infant;
5. Not found by a competent court to be of unsound mind
6. Not a company (excluding incorporated partnerships)
7. Not an undischarged bankrupt, unless leave is granted by the court by which the person was
adjudged bankrupt
8. Not a person convicted on indictment in GH or elsewhere for an offence involving fraud or
dishonesty or any offence in connection with promotion, formation or management of a
company
9. Not a company disqualified for the time being from being the officer of a company by an order of
the registrar of companies.
Appointment
• Prior consent in writing required of the person to be appointed

• A p/ship may be appointed auditors but this shall be deemed an

appointment, jointly and severally of all firm’s partners.

• The appointment of auditors shall be done within 3 months of

incorporation or prior to the delivery of the proposed
regulations to the Registrar

• The directors may appoint the first auditors of the company and
they may fill any casual vacancy.

• The registrar may appoint an auditor for the company if the

company has had no auditor for a continuous period of 3
months.
Notice to Registrar
• The company shall give notice to the registrar of:
1. Names and addresses of 1st auditors as part of the proposed
regualations;
2. Within 28 days after the occurrence of any change in the audtors, the
company shall give notice of the said change to the Registrar for
registration
3. If a continuous period of 3 months elapses w/o the company having a
duly appointed auditor.

Remuneration
• If the auditor is appointed by the directors to fill a casual vacancy
the remuneration will be fixed by the directors for the period
expiring to the conclusion of the next AGM.

• If appointed by the Registrar, it is fixed by the Registrar or the period

expiring to the conclusion of the next AGM.

• In all other cases, it is fixed by ordinary resolution.

Termination
• Position of auditor may become vacant by:
• Casual vacancy; or
• Death, auditor ceases to qualify as one; resigns by notice in writing

• Removal of auditor
• To remove, give written notice of at least 35 days to the auditor; if
appointed by director or registrar then at least 14 days notice

• Auditor has the right to be heard.