Company law notes
DUPAUL WOOD TREATMENT v ASARE
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Company Law Brief notes
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- Section 324—Representative Actions.
| DUPAUL WOOD TREATMENT v ASARE
WHEN THE REGISTRAR REFUSES TO REGISTER THE REGULATIONS Despite the delivery of the proposed regulations a registrar is not bound to register them and issue a certificate of incorporation. On the other hand the registrar cannot act in an arbitrary manner. If a party believes the refusal registration was arbitral and unlawful he may apply to the court for an order of mandamus, compelling the registrar to issue the certificate of incorporation. The grounds on which the registrar may rely to set aside the regulation are set out in section 14B Section 14—Formation of Companies. After the commencement of this Code a company shall be formed in manner following, that is to say, (a) there shall be delivered to the Registrar for registration a copy of the proposed Regulations of the company complying with sections 16 to 18 of this Code; (b) unless, in the opinion of the Registrar, (i) the Regulations do not comply with this Code; (ii) the objects for which the company is being formed or the business which it is to carry on, or any of them are unlawful; (iii) any of the subscribers to the Regulations is an infant or of unsound mind; or (iv) any of the directors named in the Regulations is under section 182 of this Code, incompetent to be appointed a director, EFFECT OF REGULATIONS WHEN REGISTERED Upon the registration of the regulations the law considers that there is a binding contract between all the many parties and not just a mere contract but acontract under seal, a specialty written contract at that. RAYFIELD v HANDS Article 11 of the association (regulations) statedthat every member who intended to transfer shares shall inform the directors who will take the shares equally between them at a fair value. The act provided that all directors were to be members. The plf seem to compel the defendant a director to buy his shares. It was held that article 11 did not seem to create a contractual relationship between the parties NB: under our law registration constitutes a contract under seal. Secondly, regulation when registered vests power in any person mentioned uinder regulation, whether or not the person is a member or officer, to point or remove any director or officer of the company. The power of appointment or disappointment is usually vested in a debenture holder or their trustees. The third effect of a regulation is that it mandate representative actions in the event that a court action is brought by a member or officer for breach of the regulations. sections 21(3) provides that any suit by a member or officer for breach of the regulations be brought in a representative capacity on behalf of oneself or members affected. Representative action are governed by section 324 of the act. Section 324—Representative Actions. Where, under any section of this Code it is provided that if legal proceedings are instituted by any person he shall sue in a representative capacity on behalf of himself and other members of a class the following provisions shall apply, that is to say, (a) such person may commence proceedings in such representative capacity without obtaining the consent and approval of any other member of the class represented and, subject to paragraph (b) of this section, such person shall have the sole conduct of the action and no other member of the class shall be deemed to be a party to the proceedings or in any way liable for the costs thereof; (b) any member of the class represented may at any time prior to final judgment apply to the Court for leave to be made a party to the proceedings whether as co-plaintiff or otherwise and the Court may grant leave upon such terms regarding the conduct of the action and otherwise as it shall think fit; and if such leave is granted the applicant shall become a party to the proceedings and liable accordingly to have an order for costs made against him; (c) any judgment given in the action shall bind and enure for the benefit of all members of the class represented, whether or not they have intervened in the proceedings in accordance with paragraph (b) of this section; (d) no proceedings shall be dismissed, settled or compromised without the leave of the Court which may, if it shall think fit, order that notice of the proposed dismissal, settlement or compromise shall be given to all members of the class represented and any other persons; (e) in relation to proceedings under section 210 of this Code this section shall be supplemented by the provisions of that section; (f) nothing in this section contained shall affect the validity of any agreement between the members of the class represented, relating to contribution towards the costs of the party or parties suing in a representative capacity. ALTERATION OF REGULATIONS Companies may , from time to time, have to amend their regulations. The act balances the need to avoid frequent changing of regulations with the need to make change possible. It accomplishes both objectives by requiring that a special resolution should be passed to allow a company to alter or add to it regulations(section22). The special resolution requires ¾ majority of it members and that is designated in advance as such and notice given to it members(section168(2)) Though the majority is a sine qua non in changing the regulation, there are additional requirements: Changing the name of the company requires the registrar’s consent. section 15 and 22. Every company must have a distinct name, one not identical with any other companyor closely resembling to be misleading or confusing(section15(2)) so if a company wishes to change it name, it first of all ascertain whether the proposed name has not already been taken. EVANGELICAL PRESBYTERIAN CHURCH OF GHANA v EVANGELICAL PRESBYTERIAN CHURCH, GHANA The plf church sued the defendant after the defendant broke away to form their own church due to misunderstanding. The defendant later changed their name to global evangelical church. Changing the number of company’s shares requires compliance of other provisions of the companies act.if the amendment of theregulations are intended to result in the conversion of accompany ltd by shares to a company ltd by guarantee section 11 has to be complied with.in the event of acquisition, purchase or redemption of shares section 57 to 663 must be complied with. Changing the company’s business prior notice of the debenture holders must be secured by a floating charge and the trustees, if any, of such debenture holders. Recourse may also be had to the court for approval regarding an arrangement or amalgamation of the company.(section 22c, 26 and 231) Changing the companys rights attached to any of the different classes of shares requires also the written consent of the holders of 75percent EXCEPTIONS You cannot change regulations to conflict with orders of the court to provide remedies of oppression. Section 217- the court on the application of any member restrain the company from engaging in any transaction which is illegal or beyond the transactions of the company or infringes the provisions of its regulations. And may declare such transaction void provided: Nothing derogates the protection afforded by the code Act is without prejudice to section 25 The right afforded to a member to apply to the court shall be without prejudice to any right he may have to institute proceedings against any director of the company. Except a member agrees in writing to do otherwise, members shall not be bound by a change in regulations to increase his or her shares holding in the company. Also regulations cannot be changed to force a member to increase his or her liability. There should be no change which converts an unlimited liability company to a limited liability company or a company with united shares. This is to protect the third parties dealing with the company. A change may be restraine d in accordance with section 217 to protect minorities. ALLEN v GOLDREEFS- the court has the jurisdiction to regard an alteration as invalid unless it is made for the benefit of the company as whole. SHUTTLEWORTH v CORKSBROTTHERS- articlesd of a company could be altered to expel a member who was defrauding the company. The company cannot escape a liability for a breach of contract if the alteration occasions a breach. SOUTHERN FOUNDARIES v SHERLAW- when aplf sues a company for alterations the plf can succeed for breach of contract which damages will be awarded but cannot be obtained to reverse the order. The court can step in to do any interpretation or rectification since the regulations is a contract between members.SCOTT v FRANK VEIL OF INCORPORATION Download 31.01 Kb. Share with your friends:
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