Responsibility for Corporate Debts in Ghana: A Conceptual Perspective

Abstract

This paper analyses the corporate entity theory and the lifting of the corporate veil in Ghana. Two major principles form the basis of the analysis. First, a company is a separate legal entity with the powers of a natural person of full capacity. Secondly, members of the company usually have limited liability. The paper notes that there are many inroads into these principles. In some situations, the Companies Code 1963 (Act 179) enforces corporate debts and liabilities against the company. In other situations, the Companies Code enforces the company's debts and liabilities against corporate officers who knowingly allowed the commission of wrongful acts. This paper therefore concludes that, under the Companies Code, a company is both a separate corporate person and an economic entity. To this end, the courts can treat the acts of corporate officers as either those of the company itself or those of the officers themselves. This paper also urges the courts to abandon lifting the corporate veil and suggests that the courts should admit remedies based on well known business principles in agency, contract, conveyance, industrial law, insolvency, tort, and trust.