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Questions and Answers
What restriction is placed on a private company regarding share acquisition?
What restriction is placed on a private company regarding share acquisition?
What limitation does a private company impose on the transfer of shares?
What limitation does a private company impose on the transfer of shares?
What is the maximum number of members allowed in a private company?
What is the maximum number of members allowed in a private company?
Which type of company is defined as one that is not a private company?
Which type of company is defined as one that is not a private company?
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In what scenario can a company limited by shares be converted to a company limited by guarantee?
In what scenario can a company limited by shares be converted to a company limited by guarantee?
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What characterizes an unlimited company?
What characterizes an unlimited company?
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Which of the following is NOT a type of company as per the provided content?
Which of the following is NOT a type of company as per the provided content?
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Which entity type cannot be converted back from a company limited by guarantee?
Which entity type cannot be converted back from a company limited by guarantee?
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What key concept is emphasized in the study of company law?
What key concept is emphasized in the study of company law?
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In which century did the concept of the joint stock company first emerge?
In which century did the concept of the joint stock company first emerge?
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What is the significance of the East India Company in the context of company law?
What is the significance of the East India Company in the context of company law?
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Which legislation marked a significant reform in Ghanaian company law?
Which legislation marked a significant reform in Ghanaian company law?
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Who played a crucial role in reforming Ghanaian company law in the 1960s?
Who played a crucial role in reforming Ghanaian company law in the 1960s?
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What historical event led to increased regulation of companies in Europe and America?
What historical event led to increased regulation of companies in Europe and America?
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Which of these is not a characteristic of joint stock companies as described?
Which of these is not a characteristic of joint stock companies as described?
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What was a primary purpose for the establishment of joint stock companies in the 17th century?
What was a primary purpose for the establishment of joint stock companies in the 17th century?
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Which of the following is NOT a responsibility of a promoter?
Which of the following is NOT a responsibility of a promoter?
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What must occur for a promoter's contract with the company to be unrescindable?
What must occur for a promoter's contract with the company to be unrescindable?
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What is the maximum time frame within which a pre-incorporation contract can be ratified by the company?
What is the maximum time frame within which a pre-incorporation contract can be ratified by the company?
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What is a key characteristic of a fiduciary relationship held by promoters?
What is a key characteristic of a fiduciary relationship held by promoters?
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Under what condition is the promoter personally bound to a pre-incorporation contract?
Under what condition is the promoter personally bound to a pre-incorporation contract?
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Which of the following criteria does NOT apply when naming a company?
Which of the following criteria does NOT apply when naming a company?
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Which statement about good faith in the context of promoters is accurate?
Which statement about good faith in the context of promoters is accurate?
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What happens to the promoters' contracts upon ratification by the company?
What happens to the promoters' contracts upon ratification by the company?
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Which business entity type is governed by the Registration of Business Names Act, 1962?
Which business entity type is governed by the Registration of Business Names Act, 1962?
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What is the primary characteristic of a Company Limited by Guarantee?
What is the primary characteristic of a Company Limited by Guarantee?
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How many individuals are required to form an Incorporated Private Partnership?
How many individuals are required to form an Incorporated Private Partnership?
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Which of the following entities has members with unlimited personal liability for debts?
Which of the following entities has members with unlimited personal liability for debts?
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What characterizes a Company Limited by Shares?
What characterizes a Company Limited by Shares?
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An External Company is defined as an entity that is formed outside of what?
An External Company is defined as an entity that is formed outside of what?
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Which entity type is required to be established for non-profit purposes?
Which entity type is required to be established for non-profit purposes?
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What does a share represent in a Company Limited by Shares?
What does a share represent in a Company Limited by Shares?
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Study Notes
Private Companies
- A private company is prohibited from inviting the public to acquire shares
- A private company can limit the rights of shareholders to transfer their shares
- A private company is limited to 50 members excluding employees (past and present) and debenture holders
Public Companies
- A public company is any company that is not a private company except companies limited by guarantee with 50 or less members.
Unlimited Companies
- The liability of members in an unlimited company is unlimited.
- This entity type is sometimes used by professional services such as law firms, where by law they are required to utilize entity types with unlimited liability.
Limited Companies
- The liability of members in a limited company is limited to what they either agreed to pay for shares (for companies limited by shares) or guaranteed for (for companies limited by guarantee).
Types of Companies
- Companies can be limited by shares, limited by guarantee, unlimited, public, private, or external.
- Companies limited by shares can be converted to companies limited by guarantee, but not vice versa.
- To convert a company limited by shares to a company limited by guarantee, there must be no unpaid liabilities on any outstanding shares and all members must agree to the conversion.
Promoters
- A promoter is deemed to be someone who has been or is interested in the formation of a company.
- Promoters have fiduciary duties to the companies they are involved with. This means they are obligated to act loyally, honestly, and in the best interest of the company.
- Promoters must act with utmost good faith towards the company.
- Promoters are responsible for compensating the company for any loss suffered due to the failure of the promoter to act with good faith.
- Promoters must account for profits or information that rightfully belong to the company, not the promoter.
Pre-Incorporation Contracts
- A pre-incorporation contract is a contract made before a company is formed.
- A pre-incorporation contract can be ratified by the company within 18 months after the company is formed.
- If a pre-incorporation contract is ratified, the company is bound by the contract as if it were in existence when the contract was initially signed.
- If a pre-incorporation contract is not ratified, the promoter who made the agreement is personally bound to the contract.
Company Names
- According to the Registrar, a company cannot have a name that is misleading, undesirable, or already being used by a different company.
- A company name cannot be deceptively similar to an existing name.
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Description
Test your knowledge on different types of companies including private, public, unlimited, and limited companies. Understand the implications of each type regarding member liability and shareholder rights. This quiz covers key definitions and characteristics that differentiate these company forms.
