Has The GFA Really Been Dissolved?

Kwesi Nyantakyi

INTRODUCTION & BACKGROUND
This write-up is a response to media reports on 7^th June 2018 of the alleged dissolution of the Ghana Football Association (GFA) by the “Government of Ghana”. The report has been covered widely by social, print, audio and visual media portals. This write-up seeks to assess the legality of the alleged dissolution and to educate the Ghanaian public on related legal processes.

The legal analysis to be carried out in this write-up is against a back-drop of the following facts:

1. The Ghana Football Association is a body corporate (artificial legal entity) registered as a Private Company limited by Guarantee.
2. The Government of Ghana is not a member or director of the Ghana Football Association.
3. The Ghana Football Association is NOT a statutory body, state-owned enterprise, government ministry, agency or department.
4. The Ghana Football Association although affiliated to FIFA, does not derive its legal existence and validity from FIFA.
5. The formation and dissolution of all Companies is governed primarily by the Companies Act, 1963 (Act 179) and Bodies Corporate (Official liquidation) Act, 1963 (Act 180).

A proper appreciation of the analysis to be conducted herein requires a basic understanding of the following technical words and phrases:

“Dissolution of a company” is the legal phenomenon of a company ceasing to exist as a legal entity and is symbolized by the striking-out of the company’s name from the Register of Companies by the Registrar-General and the publication of this fact in the Gazette.

“Liquidation of a company/Winding-up of a company” is the process preceding the dissolution of a company. By this process, the assets of a company are collected in and realized, its debts and liabilities are discharged and remainder of the net surplus assets of the company (if any) are distributed in the appropriate manner.

“Formation of a company” is the creation of company under the laws of Ghana.

“Contributory of a company” is a person who has undertaken to contribute to settle the liabilities of a company during winding-up.

“Creditor of a company” is a person to whom the company is indebted by way of money.

ANALYSIS
Law is a tool for governing social order. It is in view of the foregoing fact that Acts of Parliament are passed to govern almost all areas of national life. The birth and death of every Ghanaian company is not exempted from the law’s coverage; the former phenomenon is governed by Act 179 and the latter is governed by both Act 179 and Act 180. These Acts of Parliament provide detailed procedures by which a company can be created and the process by which a company can be dissolved/killed in Ghana. For purposes of the subject matter under review, focus would be placed on the Dissolution of a Company.

Dissolution of A Company
Under Ghanaian law, before a company can be dissolved it must first be liquidated/wound-up either fully or partially as legal circumstances may permit. In other words, the legal process of winding-up/liquidating the company must necessarily precede the dissolution of a company. There are two forms of company liquidation namely; Private liquidation and Official liquidation. Both forms ultimately lead to a company being dissolved. However, the suitability of one form over the other depends on the peculiar circumstance of the entity to be liquidated.

Private liquidation can only be carried out by a solvent company. It is also called Voluntary Liquidation because under this mode of liquidation, the members of the company voluntarily decide that their company be liquidated (this is done by a special resolution passed at a General Meeting of members). This would mean that if the members of a solvent company have not decided by the appropriate process that their company be liquidated by private liquidation, no such process can be initiated by anyone. Private liquidation is governed by Part U of Chapter Two of Act 179 (Sections 246 -261)

Official liquidation is governed by the whole of Act 180. It can be carried out on both solvent and insolvent companies. Unlike Private Liquidation, the process for liquidation under this mode can be initiated not only be members of the company but also by third parties/non-members. The following non-members of a company can initiate the official liquidation of the company:

1. Creditors of the company
2. Contributories of the company
3. Attorney-General

Initiation By Creditor or a Contributory: The creditor or contributory of a company (refer to definitions above) may petition either the Registrar-General of the Republic of Ghana for the liquidation of the company or he/she may petition the High Court for an order for the liquidation of the company. In the case of a petition to the Registrar-General, the Registrar would only grant the petition if he/she is satisfied that the company cannot settle its debts. In other words, if a company has no debt issues, the petition by the creditor/contributory would fail.

In the case of a petition to the High Court by the creditor or contributory of the company, the court would grant the order for liquidation of the company if it opines that any of the following grounds have been established:

1. The company has failed to start business within a year from its creation or has suspended business for a whole year.
2. The company has no members;
3. The business or objects of the company are unlawful, or the company is operated for an illegal purpose or the business being carried on by the company is no authorised by its Regulations;

4. The company is unable to pay its debts OR
5. The Court thinks it is just and equitable that the company should be liquidated.

Initiation By the Attorney-General: It is interesting to note that, although the Attorney-General of the Republic of Ghana can initiate the liquidation process of a company by petitioning the High Court for an order of liquidation, such a petition can only be founded on the grounds that the business/object of the company is unlawful OR the company is operated for an illegal purpose OR the business being carried on by the company is not authorised by its Regulations. The Attorney-General cannot petition under any other ground.

Following the successful initiation of the liquidation process, the Registrar-General automatically assumes the position of Liquidator of the company. He/She oversees the entire winding-up of the company. After the Registrar-General is satisfied that the process of liquidation is complete, he/she proceeds to strike-out the name of the company from the register of companies and publishes the fact in the Gazette. It is only upon striking-out of the name that the company is deemed DISSOLVED and not otherwise.

LEGAL CONCLUSIONS
It is humbly submitted that the purported dissolution of the GFA (a company limited by Guarantee) by the Government of Ghana appears to be void and of no consequence until the proper procedures for the dissolution of the company are complied with. The power to dissolve a company rests solely with the Registrar-General and not the President of the Republic of Ghana.

Additionally, a dissolution must be preceded by a formal liquidation/winding-up of the company (in this case the GFA). There can be no dissolving of the GFA without a partial or full liquidation of the GFA.

It is also humbly submitted that the Government of Ghana/President is not a member of the GFA. Also, the Government of Ghana/President is neither a creditor nor a contributory of the GFA and therefore cannot initiate liquidation of the GFA by petition to the Registrar-General or the High Court. Assuming without admitting that the Government of Ghana is a member or creditor or contributory of the GFA, it is respectfully argued that the Government of Ghana/President has neither petitioned the Registrar-General nor the High Court for the liquidation of the GFA. The Attorney-General has also not petitioned the High Court on any of the grounds stipulated under Act 180.

Accordingly, the reported dissolution of the Ghana Football Association by the Government of Ghana is unfounded in law. In as much as majority of Ghanaians (myself inclusive) are in favour of a total overhaul of the Soccer Governing Body in Ghana, all activities that the Government deems appropriate to achieve that aim must be carried out within the confines of the law.

Jeffrey Osei Mensah
Student-Ghana School of Law/Corporate MC
[email protected]
8^th June 2018