Q.1 What is the effect of incorporations of a company?

Answer: Before elaborating on the effect of a company, one must know what a company is. The word company has no strict legal meaning. To a layman the word company means an association of people who have decided to associate for the purpose of carrying on business either for profit or for charity. To a lawyer a company is an entity that is created by law and given a legal status and personality on its own distinct from its owners and officers. An entity has a legal status and personality if in law it can exercise it legal right and is subject to legal obligations in its own right. It should however be noted that not every association of people is counted as company. An association will count as company, if it is registered in accordance with law that provides for the registration of companies. In Ghana, the Companies Code 1963 Act 179 is the Law that provides for the registration of companies. So, if an association of persons is registered in accordance with Companies code Act 179, it is counted as company. After a company has been brought into existence it come with certain consequences of incorporation such as 1. It becomes separate legal entity (case Salomon v. Salomon & Co) (1897) 2. It has a perpetual succession (companies code act 179) section 38 3. It has the capacity to sue and be sued (Owusu v. R.N. Thorne)

4. (Bank of West Africa v. Appenteng) (1972) 5. It has the capacity to acquire own and dispose property both movable and unmovable (Macaura v. Northern Assurance) (1925) 6. It has the capacity to separate corporate assets from personal assets It has the capacity to borrow keep account and create charges over corporate assets 7. It has the capacity to enter in legal relation. Lee v. Lees Air Farming Ltd (1960) Morkor v. Kuma (1998-99) 8. It becomes a taxable unit.