COMPANY LAW IN GHANA- SHAREHOLDERS AGREEMENT AS SUPLEMENTATION OF CONSTITUTION AND AMENDMENT

Описание: This lecture examines two central pillars of corporate governance under Act 992: (1) the continued validity of shareholder agreements, and (2) the statutory framework governing the alteration, amendment, and revocation of a company’s constitution. Although Act 992 modernises Ghana’s company law landscape, the core common-law doctrines remain fully relevant.

1. Shareholder Agreements under Act 992
Act 992 leaves shareholder agreements entirely intact. The statute does not attempt to regulate, limit, or invalidate them. Accordingly, the well-established common-law principles continue to govern. The leading authority remains Russell v Northern Bank Development Corporation, where the House of Lords confirmed that shareholders may freely contract among themselves—except that such agreements cannot fetter statutory powers, particularly the statutory power of members to amend a company’s constitution. Euro Brokers Holdings v Monecor (London) Ltd refines rules of interpretation, and contemporary commentary, including Shapira, affirms the autonomy of private ordering among shareholders. The only substantive limit is the Russell principle: a shareholder agreement cannot override or restrict Parliament’s allocation of decision-making powers.

2. Amendments to the Constitution under Section 30 of Act 992
Section 30 introduces a clearer, more detailed regime than the former section 22 of Act 179. Under section 30(1), a company may adopt, amend, or revoke its constitution through a special resolution. Section 30(2) imposes statutory boundaries:
– The company name may be altered only with the Registrar’s approval under section 21.
– Share capital changes must comply with sections 9, 59–65, 78–82, 219 or 239.
– Alterations to objects or business require compliance with sections 20 or 239.
– Class rights may only be amended under section 50 or 239.
– The constitution itself may include entrenched provisions limiting future amendments.
– No amendment increasing a member’s liability or restricting transferability binds that member without written consent.

These provisions supply procedural safeguards that were not fully articulated under Act 179.

3. Judicial Principles Governing Amendments
Despite statutory reform, the courts continue to apply long-standing common-law standards. The guiding test remains whether the amendment is made bona fide for the benefit of the company as a whole, as articulated in Greenhalgh v Arderne Cinemas Ltd. The courts have rejected oppressive amendments (Brown v British Abrasive Wheel Co) and upheld protective ones (Sidebottom v Kershaw, Leese & Co). In Ghana, Du Paul Wood Treatment v Asare emphasises strict compliance with statutory form, holding that defective attempts to adopt new constitutions are void.

Contractual conflicts do not invalidate amendments. In Southern Foundries v Shirlaw, the House of Lords held that although an amendment may breach an existing contract, the amendment remains legally effective; the affected party’s remedy lies in damages. This coheres with section 29(4) of Act 992 on the contractual effect of the constitution.

4. Overall Effect of Act 992
Act 992 modernises terminology and structure but preserves the substantive architecture of company constitutional law. It replaces “regulations” with “constitution” (sections 23–32), strengthens procedural controls on amendments (section 30), reaffirms the constitution’s contractual force (section 29), introduces default constitutional templates (sections 24–25), and clarifies the limits on directors’ powers (section 189). The fundamental doctrines—member rights, alteration standards, and the interaction between private contracts and corporate constitutions—remain unchanged.

Leading authorities include Wood v Odessa Waterworks Co, Adehyeman Gardens v Assibey, Du Paul Wood Treatment v Asare, and Greenhalgh v Arderne Cinemas Ltd. Together, they ensure that Ghanaian company law continues to balance shareholder autonomy, statutory safeguards, and the overarching requirement of acting in the company’s best interests.