The Doctrine of Ultra Vires and the Protection of Shareholders, Creditors and Third Parties in Ghana: A Balancing Act

Commonwealth Law Bulletin, Vol. 35, No. 3, September 2009, 535–543

Posted: 25 Feb 2014

See all articles by Ernest Owusu-Dapaa

Ernest Owusu-Dapaa

Kwame Nkrumah University of Science and Technology, Faculty of Law; Lancaster University Ghana

Samuel Adarkwah

Cornell University; Kwame Nkrumah University of Science and Technology, Ghana; Schulich School of Law, Dalhousie University

Date Written: September 18, 2009

Abstract

The doctrine of ultra vires was at common law invoked to frustrate expectations of innocent parties that entered into transactions with companies outside their object clause. The common law doctrine of ultra vires is applicable in Ghana but with necessary modification under the Companies Code and it is an effective tool for the protection of shareholders, creditors and third party’s interest in the company. Whilst third parties acting in good faith and without notice are protected under the law, shareholders and creditors may restrain the company from dealing with the third party in the case of future transactions. This ensures balance and in any event when an action is instituted the court is obliged to look at the equities involved.

Keywords: Ultra Vires, Company Law, Ghana, Corporate Law, Shareholders, Creditors

Suggested Citation

Owusu-Dapaa, Ernest and Adarkwah, Samuel, The Doctrine of Ultra Vires and the Protection of Shareholders, Creditors and Third Parties in Ghana: A Balancing Act (September 18, 2009). Commonwealth Law Bulletin, Vol. 35, No. 3, September 2009, 535–543, Available at SSRN: https://ssrn.com/abstract=2400466

Ernest Owusu-Dapaa (Contact Author)

Kwame Nkrumah University of Science and Technology, Faculty of Law ( email )

Faculty of Law
Faculty of Law
AK

HOME PAGE: http://www.knust.edu.gh/pages/

Lancaster University Ghana ( email )

Jungle Road near A&C mall
East Legon
Accra, Greater Accra 0000
Ghana

Samuel Adarkwah

Cornell University ( email )

Ithaca, NY 14853
United States

Kwame Nkrumah University of Science and Technology, Ghana

Faculty of Law
Faculty of Law
AK

Schulich School of Law, Dalhousie University ( email )

6061 University Avenue
6061 University Ave
Halifax, Nova Scotia B3H 4H9
Canada

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