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ICAG L1 Business & Corporate Law study materials
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ICAG L1 Business & Corporate Law practice questions

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Question 1Role knowledge and related same-jurisdiction law

Under Article 11 of Ghana's 1992 Constitution, which is listed as a source of Ghanaian law?

  1. The Constitution, enactments, Orders/Rules/Regulations made under constitutional power, the existing law, and the common law Correct answer.
  2. United Nations General Assembly resolutions alone
  3. Only Acts of Parliament passed after 1992
  4. Customary law to the exclusion of common law

Explanation

Article 11 of the 1992 Constitution lists the sources of Ghanaian law as the Constitution itself; enactments made by or under the authority of Parliament; Orders, Rules and Regulations made under a power conferred by the Constitution; the existing law; and the common law (which includes customary law). ICAG Paper 1.3 expects candidates to identify these sources as the foundation of Ghana's legal system.

Question 2Role knowledge and related same-jurisdiction law

In Ghana's court hierarchy, which court sits at the apex of the Superior Courts?

  1. Circuit Court
  2. High Court
  3. Supreme Court Correct answer.
  4. Court of Appeal

Explanation

Ghana's Superior Courts comprise the Supreme Court, the Court of Appeal and the High Court (and Regional Tribunals). The Supreme Court is the final appellate court and exercises final judicial power. Knowing the hierarchy is essential for understanding precedent and supervisory jurisdiction tested in Paper 1.3 Section A.

Question 3Role knowledge and related same-jurisdiction law

What does the doctrine of judicial precedent primarily require of lower courts in Ghana?

  1. Follow ratio decidendi of higher courts when the material facts are similar Correct answer.
  2. Ignore earlier decisions and decide each case afresh
  3. Apply only customary law regardless of prior judgments
  4. Treat every foreign judgment as binding Ghanaian law

Explanation

Precedent (stare decisis) means lower courts are bound by the ratio decidendi of higher courts in like cases. Obiter dicta are persuasive only. Paper 1.3 requires candidates to explain case law and precedent within Ghana's court hierarchy as part of the essential elements of the legal system.

Question 4Role knowledge and related same-jurisdiction law

Which statement best distinguishes civil law proceedings from criminal law proceedings in Ghana?

  1. Civil cases are always tried in the Supreme Court only
  2. Criminal cases seek punishment for offences against the state; civil cases resolve private rights and remedies Correct answer.
  3. Civil cases never award damages
  4. Criminal law never involves the Attorney-General

Explanation

Criminal law concerns offences against the state and typically seeks conviction and punishment, while civil law resolves disputes between private parties (or against public bodies) seeking remedies such as damages or injunctions. Paper 1.3 expects this foundational distinction within the legal system section.

Question 5Role knowledge and related same-jurisdiction law

Compared with court litigation, which is a recognised advantage of alternative dispute resolution (ADR) for business disputes in Ghana?

  1. ADR awards can never be enforced
  2. ADR abolishes all substantive contract rights
  3. ADR typically offers greater confidentiality, flexibility and potential to preserve commercial relationships Correct answer.
  4. Only criminal matters may use mediation

Explanation

ADR mechanisms such as negotiation, mediation and arbitration often provide confidentiality, party autonomy, speed and relationship preservation compared with open court proceedings. Paper 1.3 requires candidates to explain the nature, advantages and disadvantages of ADR versus court-adjudicated disputes, including arbitration and arbitral awards.

Question 6Role knowledge and related same-jurisdiction law

Which set correctly lists the essential elements of a simple contract under Ghanaian common-law principles?

  1. Offer and signature only
  2. Consideration and registration with the Registrar of Companies only
  3. Witnesses and a company seal only
  4. Offer, acceptance, consideration, intention to create legal relations, capacity and legality Correct answer.

Explanation

A simple contract generally requires offer, acceptance, consideration, intention to create legal relations, capacity and legality of object. Paper 1.3 Section B places heavy weight on identifying and applying these formation elements in business scenarios.

Question 7Role knowledge and related same-jurisdiction law

A supermarket displays goods with price tags on its shelves. In contract law, this display is generally treated as:

  1. A binding offer that customers must accept by picking up the goods
  2. An irrevocable unilateral contract
  3. A deed requiring sealing
  4. An invitation to treat, with the customer's presentation at the till usually constituting the offer Correct answer.

Explanation

Goods displayed for sale are classically an invitation to treat, not an offer. The customer typically makes the offer at the checkout, which the seller may accept or reject. Distinguishing offer from invitation to treat is a core Paper 1.3 contract topic.

Question 8Role knowledge and related same-jurisdiction law

Under the mirror-image rule of acceptance, a purported acceptance that introduces new material terms is usually treated as:

  1. A binding acceptance of the original offer
  2. A counter-offer that rejects the original offer Correct answer.
  3. An invitation to treat only
  4. A deed of variation automatically

Explanation

Acceptance must generally correspond to the terms of the offer. Introducing new material terms is a counter-offer that kills the original offer. Paper 1.3 tests this classic formation rule alongside postal and instantaneous communication principles.

Question 9Role knowledge and related same-jurisdiction law

In contract law, consideration is best described as:

  1. Something of value in the eyes of the law given in exchange for a promise Correct answer.
  2. A gratuitous promise with no exchange
  3. Only cash paid to a government agency
  4. The company's stated share capital

Explanation

Consideration is the bargained-for exchange that makes a simple promise enforceable - something of value moving from the promisee. Without consideration (or a deed), a bare promise is generally unenforceable. This is a foundational Section B concept for accountants advising on commercial bargains.

Question 10Role knowledge and related same-jurisdiction law

The doctrine of privity of contract generally means that:

  1. Anyone who hears of a contract may sue on it
  2. Contracts never bind companies
  3. Agents can never bind principals
  4. Only parties to the contract may enforce or be bound by its terms, subject to recognised exceptions Correct answer.

Explanation

Privity holds that a contract confers rights and obligations only on the parties to it, though agency, assignment and some statutory or equitable exceptions may apply. Paper 1.3 expressly requires explanation of privity and third-party rights within the law of obligations.

Question 11Role knowledge and related same-jurisdiction law

In contract classification, a condition is a term that:

  1. Goes to the root of the contract so that a serious breach may entitle the innocent party to terminate and claim damages Correct answer.
  2. Is always trivial and never allows termination on breach
  3. Can only appear in employment contracts
  4. Is identical to an invitation to treat

Explanation

Conditions are important terms going to the root of the bargain; breach may justify repudiation plus damages. Warranties are lesser terms usually sounding only in damages. Paper 1.3 requires candidates to distinguish conditions, warranties and related expressions.

Question 12Role knowledge and related same-jurisdiction law

The contra proferentem rule applied to exclusion clauses generally means that:

  1. Exclusion clauses always defeat all liability regardless of wording
  2. Ambiguities in an exclusion clause are construed against the party seeking to rely on it Correct answer.
  3. Exclusion clauses are void in every commercial sale
  4. Only oral exclusion clauses are enforceable

Explanation

Contra proferentem resolves ambiguity against the drafter or the party relying on the exclusion. Combined with incorporation rules, this restricts harsh exclusions. Paper 1.3 covers exclusion clauses, their effect and restrictions on their use.

Question 13Role knowledge and related same-jurisdiction law

Fraudulent misrepresentation inducing a contract typically entitles the misled party to:

  1. Ignore the misrepresentation forever with no remedy
  2. Only a criminal prosecution with no civil remedy
  3. Automatic specific performance in every case
  4. Rescind the contract and/or claim damages for deceit, subject to bars to rescission Correct answer.

Explanation

Fraudulent misrepresentation allows rescission and damages in the tort of deceit (subject to affirmation, lapse of time, third-party rights, etc.). Paper 1.3 covers misrepresentation types and remedies as vitiating factors.

Question 14Role knowledge and related same-jurisdiction law

Which remedy aims to put the innocent party, so far as money can, in the position they would have occupied had the contract been performed?

  1. Punitive imprisonment of the breaching party
  2. Expectation (compensatory) damages Correct answer.
  3. Criminal fine payable to the state only
  4. Automatic winding up of the breaching company

Explanation

Compensatory expectation damages are the primary common-law remedy for breach, subject to remoteness (Hadley v Baxendale principles) and mitigation. Paper 1.3 requires explanation of damages rules and equitable remedies such as injunction and specific performance.

Question 15Role knowledge and related same-jurisdiction law

Specific performance is most likely to be ordered where:

  1. Damages are inadequate, for example unique goods or interests in land Correct answer.
  2. Damages would adequately compensate for ordinary fungible goods
  3. The claimant has unclean hands and delayed unreasonably
  4. The contract is illegal

Explanation

Specific performance is an equitable remedy granted when damages are inadequate - commonly for land or unique subject-matter - and subject to equitable bars. Paper 1.3 lists specific performance and injunction among equitable remedies candidates must identify.

Question 16Role knowledge and related same-jurisdiction law

Quantum meruit generally allows a party to recover:

  1. Punitive damages unrelated to work done
  2. Only the exact contract price even if no work was done
  3. Statutory fines under the Companies Act
  4. A reasonable sum for work done where no price was fixed or the contract was discharged after part performance Correct answer.

Explanation

Quantum meruit ('as much as he has deserved') is a restitutionary/common-law claim for reasonable payment for services where price was not agreed or the contract ends after valuable part performance. Paper 1.3 expressly lists quantum meruit among remedies.

Question 17Role knowledge and related same-jurisdiction law

In the tort of negligence, the Caparo-style approach to duty of care typically examines:

  1. Only whether the defendant intended to harm the claimant
  2. Whether a contract existed between the parties only
  3. Whether the claimant paid stamp duty
  4. Foreseeability of harm, proximity, and whether imposing a duty is fair, just and reasonable Correct answer.

Explanation

Modern negligence duty analysis commonly asks whether harm was reasonably foreseeable, whether there was proximity, and whether a duty is fair, just and reasonable. Paper 1.3 requires explanation of duty of care, breach, causation, remoteness and accountant liability including negligent misstatement.

Question 18Role knowledge and related same-jurisdiction law

Hedley Byrne principles primarily concern liability for:

  1. Assault and battery
  2. Negligent misstatement causing pure economic loss where responsibility was assumed Correct answer.
  3. Strict liability for escaping water only
  4. Breach of statutory employment quotas

Explanation

Hedley Byrne recognised that a duty may arise for negligent misstatements causing economic loss where the adviser assumes responsibility and the recipient reasonably relies. Accountants' advisory work is a classic Paper 1.3 application of this doctrine.

Question 19Role knowledge and related same-jurisdiction law

Vicarious liability in tort generally means that:

  1. Only the employee can ever be sued for workplace torts
  2. Companies cannot be liable in tort
  3. An employer may be liable for torts committed by an employee in the course of employment Correct answer.
  4. Liability ends if the employee was paid a salary

Explanation

Vicarious liability attributes an employee's tort committed in the course of employment to the employer. Paper 1.3 lists vicarious liability among tort concepts students must explain alongside duty, breach and defences.

Question 20Role knowledge and related same-jurisdiction law

Agency by ratification arises when:

  1. An agent always has unlimited authority from birth
  2. A company issues shares to the public
  3. A principal later adopts an unauthorised act done in the principal's name by someone purporting to act as agent Correct answer.
  4. A floating charge crystallises

Explanation

Ratification allows a principal to adopt an act done without prior authority, retrospectively clothing it with authority if conditions are met. Paper 1.3 requires describing how agency is created, including express, implied, apparent authority and ratification.

Question 21Role knowledge and related same-jurisdiction law

An agent who makes a secret profit in breach of fiduciary duty typically:

  1. May keep the profit without disclosure
  2. Must account to the principal for the secret profit and may face termination of agency Correct answer.
  3. Automatically becomes a shareholder of the principal company
  4. Converts the agency into a partnership

Explanation

Agents owe fiduciary duties including loyalty and must not make undisclosed profits from their position. Secret profits are accountable to the principal. Paper 1.3 emphasises fiduciary duties of agents, especially regarding partners, promoters and directors.

Question 22Role knowledge and related same-jurisdiction law

Under the Sale of Goods Act, 1962 (Act 137), a contract of sale of goods is primarily a contract whereby:

  1. Parties exchange land for shares only
  2. A company issues debentures
  3. The seller transfers or agrees to transfer property in goods to the buyer for a price consisting wholly or partly of money Correct answer.
  4. An employee assigns wages to an employer

Explanation

Act 137 defines a contract of sale as a contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a price consisting wholly or partly of money. Paper 1.3 specifically references Act 137 provisions on sale of goods that accountants must apply.

Question 23Role knowledge and related same-jurisdiction law

The nemo dat quod non habet rule in sale of goods means that:

  1. Buyers always get perfect title from any seller
  2. A seller generally cannot pass a better title than the seller has, subject to recognised exceptions Correct answer.
  3. Risk never passes until payment
  4. All sales must be by sealed deed

Explanation

Nemo dat provides that no one can give what they do not have: a non-owner generally cannot pass good title, though exceptions (e.g., certain mercantile agent, estoppel, buyer in possession situations under statute) may apply. Paper 1.3 covers passing of property, risk and title rules under Act 137.

Question 24Role knowledge and related same-jurisdiction law

Under Ghana's Hire-Purchase Act, 1974 (NRCD 292), 'protected goods' are goods where:

  1. The hirer has paid at least one-third of the hire-purchase price
  2. The hirer or buyer has paid at least one-half of the hire-purchase price (or total purchase price), so the owner generally needs a court action to recover possession Correct answer.
  3. The goods are always land
  4. Only government ministries may hire the goods

Explanation

Under NRCD 292, goods become 'protected goods' once at least one-half of the hire-purchase price (or total purchase price under a conditional sale) has been paid or tendered. The owner/seller then generally cannot recover possession otherwise than by court action. This is Ghana's half threshold - not the UK Hire-Purchase Act's one-third rule. Paper 1.3 references conditional sale, protected goods and Hire Purchase Act provisions.

Question 25Role knowledge and related same-jurisdiction law

A bill of exchange is best described as:

  1. An unconditional order in writing requiring payment of a sum of money, meeting statutory formalities Correct answer.
  2. A conveyance of land
  3. A company's constitution
  4. An employment identity card

Explanation

Negotiable instruments include bills of exchange, cheques and promissory notes. A bill is an unconditional written order to pay a sum certain. Paper 1.3 requires definition of negotiable instruments and related duties and liabilities of parties.

Question 26Role knowledge and related same-jurisdiction law

A letter of credit in international trade primarily functions as:

  1. A personal guarantee by the buyer with no bank involvement
  2. A bank's undertaking to pay the seller against conforming documents under the credit terms Correct answer.
  3. A floating charge over all assets
  4. An AGM notice

Explanation

Letters of credit provide payment security: the issuing bank undertakes to pay on presentation of conforming documents. Paper 1.3 lists letters of credit (and letters of comfort) among commercial instruments candidates must describe.

Question 27Role knowledge and related same-jurisdiction law

In insurance contract law, 'insurable interest' generally requires that:

  1. Anyone may insure any stranger's property without connection
  2. Only companies may buy insurance
  3. The insured stand to suffer a recognised loss if the insured event occurs Correct answer.
  4. Premiums must be paid in foreign currency only

Explanation

Insurable interest means the insured has a lawful financial or other recognised interest in the subject-matter so that they would suffer loss from the insured peril. Paper 1.3 covers nature of insurance contracts, insurable interest, subrogation and contribution.

Question 28Role knowledge and related same-jurisdiction law

Subrogation in insurance allows the insurer, after indemnifying the insured, to:

  1. Cancel all future policies worldwide
  2. Step into the insured's rights against third parties responsible for the loss Correct answer.
  3. Imprison the insured
  4. Issue shares in the insured company

Explanation

Subrogation prevents double recovery: after paying an indemnity, the insurer may pursue the insured's claims against wrongdoers. Paper 1.3 lists subrogation and contribution among insurance concepts.

Question 29Role knowledge and related same-jurisdiction law

Duress as a vitiating factor in contract law involves:

  1. A freely negotiated commercial bargain
  2. A clerical typing error that both parties intended
  3. Illegitimate pressure that coerces a party's consent to contract Correct answer.
  4. An invitation to treat in a catalogue

Explanation

Duress vitiates consent where illegitimate pressure leaves the victim with no practical choice. Related doctrines include undue influence and unconscionability. Paper 1.3 requires description of duress, undue influence, unconscionability and contracts in restraint of trade.

Question 30Role knowledge and related same-jurisdiction law

A contract in unreasonable restraint of trade is generally:

  1. Void or unenforceable to the extent it unreasonably restricts trade, subject to reasonableness in interest of parties and public Correct answer.
  2. Always fully enforceable regardless of scope
  3. Mandatory for every employment contract in Ghana
  4. The same as a floating charge

Explanation

Restraints of trade (e.g., overly broad non-competes) are prima facie void unless reasonable in protecting a legitimate interest of the parties and consistent with public interest. Paper 1.3 expressly includes contracts in restraint of trade among obligations topics.

Question 31Role knowledge and related same-jurisdiction law

Under Ghanaian employment law concepts tested by ICAG, a contract of service typically describes:

  1. An employment relationship where the worker is an employee under the employer's control and organisation Correct answer.
  2. An independent contractor relationship only
  3. A partnership between two companies
  4. A share subscription agreement

Explanation

A contract of service creates employment; a contract for services engages an independent contractor. Paper 1.3 requires explaining this distinction and applying tests such as control, integration, multiple reality and entrepreneurial tests.

Question 32Role knowledge and related same-jurisdiction law

Which test focuses on whether the worker is an integral part of the organisation rather than accessory to it?

  1. The postal rule
  2. The integration (organisation) test Correct answer.
  3. The nemo dat rule
  4. The Caparo three-part test alone

Explanation

The integration test asks whether the person is part and parcel of the organisation. It is one of several common-law status tests Paper 1.3 lists alongside control, multiple reality and entrepreneurial tests for contracts of service.

Question 33Role knowledge and related same-jurisdiction law

The Labour Act, 2003 (Act 651) is the principal Ghanaian statute governing:

  1. Only maritime salvage claims
  2. Employment relationships, including rights and duties of employers and employees, and related labour matters Correct answer.
  3. Incorporation of companies under Act 992 alone
  4. Stamp duty on conveyances only

Explanation

Act 651 is Ghana's core labour statute covering contracts of employment, worker rights, termination and industrial relations matters relevant to accountants managing or advising on staff. Paper 1.3 Section C is built around employment relationships under this framework.

Question 34Role knowledge and related same-jurisdiction law

Unfair termination under Ghanaian labour law concepts generally refers to:

  1. Any resignation by an employee
  2. Ending employment in circumstances that breach statutory or contractual protections against unjust dismissal Correct answer.
  3. Automatic promotion of the employee
  4. Transfer of shares between shareholders

Explanation

Unfair termination/dismissal doctrines protect employees against unjust endings of employment and provide remedies. Paper 1.3 requires explanation of unfair termination, dismissal and redundancy and available remedies.

Question 35Role knowledge and related same-jurisdiction law

Redundancy in employment law typically arises when:

  1. An employee is promoted to a higher grade
  2. A customer returns defective goods
  3. An employee is dismissed because the role is no longer needed due to reorganisation, closure or diminished requirements for work of a particular kind Correct answer.
  4. A director declares a dividend

Explanation

Redundancy concerns cessation or diminution of the need for employees to do work of a particular kind, often with statutory notice and compensation rules. Paper 1.3 groups redundancy with unfair termination and remedies.

Question 36Role knowledge and related same-jurisdiction law

Which remedy is commonly associated with successful unfair dismissal or unfair termination claims?

  1. Reinstatement, re-engagement and/or compensation as provided by labour law Correct answer.
  2. Compulsory criminal imprisonment of every manager
  3. Automatic winding up of the employer company
  4. Cancellation of the Companies Act

Explanation

Labour remedies typically include reinstatement, re-engagement and compensation where unfair termination is established. Paper 1.3 requires discussing remedies available to those subject to unfair dismissal or redundancy.

Question 37Role knowledge and related same-jurisdiction law

An employer's core duties commonly include:

  1. Refusing all wages forever
  2. Paying agreed remuneration, providing work as agreed, and ensuring a safe working environment within legal standards Correct answer.
  3. Making the employee a director automatically
  4. Transferring all company assets to the employee

Explanation

Employers must pay wages, respect contractual terms and meet health and safety and other statutory duties. Paper 1.3 requires explaining rights and duties of employers and employees under employment relationships.

Question 38Role knowledge and related same-jurisdiction law

An employee's duties commonly include:

  1. Disclosing trade secrets to competitors for personal gain
  2. Ignoring all workplace policies
  3. Refusing to attend work without consequence in every case
  4. Faithful service, obedience to lawful instructions, and care in performing work Correct answer.

Explanation

Employees owe duties of fidelity, obedience to lawful orders and reasonable care. Breach may justify disciplinary action or dismissal. Paper 1.3 covers employee rights and duties as part of employment law.

Question 39Role knowledge and related same-jurisdiction law

Collective bargaining in labour relations refers to:

  1. Individual salary negotiation only with no union involvement
  2. A board resolution to issue preference shares
  3. Arbitration of a bill of exchange dispute
  4. Negotiation between employers (or associations) and workers' representatives/unions over terms and conditions of employment Correct answer.

Explanation

Collective bargaining is the process by which organised labour and management negotiate workplace terms. Industrial dispute resolution sits alongside it in Ghana's labour framework and is relevant to accountants advising organisations with unionised workforces.

Question 40Role knowledge and related same-jurisdiction law

The control test for employment status primarily asks:

  1. Whether the worker controls how, when and what work is done, or whether the engager does Correct answer.
  2. Whether the worker owns freehold land
  3. Whether stamp duty was paid on a lease
  4. Whether the Supreme Court sealed the contract

Explanation

The control test examines the degree of control the engager exercises over the worker's method and performance of work - a classic indicator of employment. Paper 1.3 lists the control test among status determination tests.

Question 41Role knowledge and related same-jurisdiction law

A key legal distinction of a limited liability company compared with a sole proprietorship is that:

  1. The sole trader always has limited liability and the company never does
  2. Neither form can enter contracts
  3. Sole traders must register under the Companies Act 2019 as companies
  4. The company has separate legal personality distinct from its members; the sole trader does not Correct answer.

Explanation

Incorporation under the Companies Act 2019 (Act 992) creates a separate legal person; a sole proprietorship has no such separation and the owner has unlimited personal liability. Paper 1.3 Section D requires explaining distinctions between sole proprietorships, partnerships and limited companies.

Question 42Role knowledge and related same-jurisdiction law

In a general partnership, partners typically bear:

  1. No liability for partnership debts
  2. Liability limited only to unpaid shares under Act 992 automatically
  3. Liability only if they are also company directors
  4. Joint and several unlimited liability for partnership debts (subject to the partnership form used) Correct answer.

Explanation

Traditional partnerships lack separate legal personality like a company, and partners are commonly jointly and severally liable for firm debts. Paper 1.3 requires describing partner liability and formation/termination of partnerships.

Question 43Role knowledge and related same-jurisdiction law

The Companies Act, 2019 (Act 992) replaced which earlier principal companies legislation in Ghana?

  1. The Labour Act 2003
  2. The Sale of Goods Act 1962 only
  3. The Companies Code, 1963 (Act 179) Correct answer.
  4. The Data Protection Act 2012

Explanation

Act 992 modernised Ghanaian company law and replaced the Companies Code 1963 (Act 179). Paper 1.3 candidates must apply Act 992 on types of companies, formation, management and capital - not the repealed Code.

Question 44Role knowledge and related same-jurisdiction law

Under Act 992, companies may be formed as entities limited by shares, limited by guarantee, or:

  1. Unlimited companies Correct answer.
  2. Only state-owned statutory corporations with no private option
  3. Only partnerships registered as companies automatically
  4. Only sole proprietorships

Explanation

Act 992 recognises companies limited by shares, limited by guarantee, and unlimited companies, and distinguishes private and public companies. Paper 1.3 requires describing types of companies under Act 992.

Question 45Role knowledge and related same-jurisdiction law

Separate legal personality of a company (the Salomon principle) generally means that:

  1. Shareholders and the company are the same legal person
  2. Directors have no duties
  3. Creditors can never be paid
  4. The company can own property, sue and be sued in its own name, distinct from its members Correct answer.

Explanation

Upon incorporation the company becomes a separate legal person capable of owning assets and bearing liabilities distinct from members. Paper 1.3 requires explaining separate legal personality and the veil of incorporation, including limited circumstances for lifting the veil.

Question 46Role knowledge and related same-jurisdiction law

Lifting (or piercing) the corporate veil may occur in limited circumstances such as:

  1. Fraud, sham, or where statute/agency principles require looking through the company facade Correct answer.
  2. Whenever a shareholder disagrees with a dividend policy
  3. Automatically every financial year
  4. Whenever ADR is used

Explanation

Courts lift the veil sparingly - classic grounds include fraud, facade/sham and certain statutory contexts. Paper 1.3 expects candidates to know personality is the rule and lifting is exceptional.

Question 47Role knowledge and related same-jurisdiction law

A company promoter is a person who:

  1. Audits the company's annual financial statements after incorporation only
  2. Takes part in forming the company and setting it going, often arranging pre-incorporation contracts Correct answer.
  3. Always serves as the official liquidator
  4. Regulates public procurement under Act 663

Explanation

Promoters conceive and form the company, often negotiating pre-incorporation contracts and arranging capital. Paper 1.3 requires explaining promoters' roles and duties, including fiduciary obligations during formation.

Question 48Role knowledge and related same-jurisdiction law

Documents required in the company formation process under Act 992 typically include constitutional documents and filings with:

  1. Only the Supreme Court registry
  2. Only the Bank of Ghana for every private company
  3. Only the Financial Intelligence Centre
  4. The Office of the Registrar of Companies (ORC) Correct answer.

Explanation

Incorporation is effected through filings with the Office of the Registrar of Companies. Paper 1.3 requires describing the company formation process and documents required under Act 992.

Question 49Role knowledge and related same-jurisdiction law

A private company limited by shares, compared with a public company, typically:

  1. May freely offer shares to the public without restriction
  2. Cannot have directors
  3. Cannot keep statutory books
  4. Faces restrictions on offering shares to the public and often on transferability under its constitution and Act 992 Correct answer.

Explanation

Private companies are restricted from public offers of shares and usually limit membership/transfers; public companies may raise capital from the public subject to securities regulation. Paper 1.3 covers private versus public company distinctions.

Question 50Role knowledge and related same-jurisdiction law

Statutory books and records that a limited company must keep generally include registers such as:

  1. Only a personal diary of the CEO with no legal effect
  2. Only foreign judgments
  3. Registers of members, directors and other prescribed records under Act 992 Correct answer.
  4. Only unpaid parking tickets

Explanation

Act 992 requires companies to maintain specified statutory books and records (e.g., members and directors registers). Paper 1.3 learning outcomes include identifying statutory books and records a limited company must keep.