Title of Book: Modern Principles of Company Law in Ghana
Author: Ferdinand D. Adadzi
Reviewer: Prof. Kofi Abotsi
Dean, UPSA Law School
The book, “Modern Principles of Company Law in Ghana” provides a vital compendium of the law governing the establishment, management, dissolution and post liquidation issues affecting corporations in Ghana. In this guise, the book adds to the rather small library of materials on the subject in the country and bridges the yawning gap in the literature which has existed for some time now. The sheer depth and volume of the book reflects the coverage of the subjects implicated in Ghanaian company law and the core reforms introduced by the new legislation, namely Act 992 of 2019. The book comes at a pivotal time in Ghana when the resilience and survival of companies has become topical and shaped legal and regulatory policy in the country.
The book adopts a simple methodology and analytical style that makes for easy reading. Thus, consistent with standard works on the subject, the textual narrative and analysis is followed by a discussion of cases and other material defined by rigor and critical reflections on the application of the principles as applied in the cases. This style promises to greatly aid in the optimal use of the book as a source material.
More specifically, the book covers the broad spectrum of topics and themes as are contained in the Companies Act (2019) Act 992. Though on companies, the book provides overview of other entities through which business can be undertaken including sole proprietorship, partnership and statutory corporation. On companies, the book begins with such standard and elementary topics such as the establishment of companies and other constituent themes of establishment including the Constitution of companies, promoters, pre-incorporation contracts, capacity and the effect of incorporation. These topics provide a background context for the discussion of the more complex topics to be subsequently treated in the book. But from a more practical perspective, the treatment of these foundational topics affords a good grounding for an understanding of the higher themes treated in the book.
The author’s style of analysis further aids in a deconstruction of foundational but topical issues in company law. This is important for grounding in the law and would be a veritable asset for law students wishing to both appreciate and internalize the law in their studies. For example, the author’s discussion of the abolishment or otherwise of the rule on ultra vires is fluid and should appeal to even the uninitiated in law. This makes the book user friendly and one that should be of benefit to lay readers in law.
The author builds on his primary material by delving into more topical but problematic themes such as corporate governance, membership of companies, meetings and deliberations, as well as the role, powers and liability of directors of companies. Mr Adadzi’s work in this book also touches on the thorny issue of corporate capitalization and he discusses equity capitalization through shares, as well as debt financing through debentures. The book’s treatment of the principles and effect of corporate governance as a composite topic, separates it from the pack of similar textbooks and makes it a truly handy material for both students and practitioners. The author correctly and rather succinctly groups the constituent bodies around which corporate governance revolves in the company as (1) shareholders, (2) directors, (3) managing director and managers, (4) auditor and (5) Company Secretary. Within the context of this grouping, I take exception to the author’s discounting of the role of regulatory agencies such as the Bank of Ghana (BoG), whose influencing role act as external agents of corporate governance. The mediating role of the BoG during the banking crisis is illustrative of the need to broaden the scope of the conceptual underpinnings of corporate governance as traditionally treated, given the impact and intermediating influences of regulatory agencies in this vein. The author’s silence on this is perhaps reflective of his concentration on internal structures of governance and hence the traditional systems of governance.
This minor blip notwithstanding, the author demonstrates a marked level of appreciation of the subject and integrates core principles of corporate governance with specific provisions of Act 992. This is a highly welcome development that should hopefully end the isolated treatment of topics such as the BOD and shareholders role and dynamics in law schools.
The book’s treatment of corporate capitalization is nuanced and helpfully reflects recent events and emerging legislative trends impinging on Ghanaian corporate law. Mechanisms of corporate capitalization has often been treated in a patchy way by works on the subject, and the author’s comprehensive evaluation of the themes under the topic provides useful starter material for anyone wishing to research into the field. Given the recent spate of corporate insolvencies and collapses, this topic is utterly important for both students and practitioners. The discussion on shares is particularly illuminating as the author shows a mastery of the topic and spares no effort in breaking down a salient subject into an easy and digestible material worthy of his scholarship in the field. Having co-authored a paper on corporate constitutionalism and the power of constituent interests with him, the author shows his known finesse on the subject and brings this strongly to the benefit of the book. His categorization of the character and genus of shares and the rights conferred through shareholding is apt and is one that students especially will find very friendly.
An issue of current importance discussed in this work is the subject of mergers and acquisitions captured under the broad rubric of restructuring and reorganization. When read in the context of his treatment of corporate administration liquidation, the importance of the issue becomes even more highlighted and his use of the new statutory reform (particularly the passage of the Corporate Insolvency & Restructuring Act, 2020 (Act 1052)) sheds light on the subject. Recent events in bank collapses and the creation of successor umbrella corporate entities underlie the importance of this subject, and its discussion in this work cannot be underestimated.
As earlier mentioned, the author discusses other topics treated within the book with admirable competence and depth; perhaps it is a tribute to the author’s fidelity to conventional structure that he does not emphasize other instruments of corporate capitalization including bonds. As I seize the privilege to second guess him in this review, I will assume that this omission may be due to an attempt to avoid the topics that are often seen as being reserved for a mainstream course on corporate finance rather than a book on company law. I am confident that the author will reflect on these in his second edition to this illustrious first.
The book employs a simple and lucid style in its narrative and analyses, and the simplicity of the writing should greatly endear it to students. While there is no gainsaying the truth that the immediate beneficiaries of this scholarly enterprise are students, the book is a handy tool in the hands of practitioners, judges, academics and members of the legal fraternity in general.
For a profession driven by the depth of its stock of literature, the increasing numbers of legal publications come to fill a critical gap which has plagued the practice of law and legal academia for some time now and Ferdinand Adadzi’s book is a vital addition to the evolving legal depository.
To all accordingly, I strongly commend this book!