Corporate and Commercial Practice, Bar Final 2025/2026

Question 120 marks (compulsory)

The Freetown Players Co. Ltd. (Freetown), a publicly listed entertainment and media conglomerate registered in Sierra Leone, has entered into a strategic arrangement with the Waterloo Co., a private entity specialising in digital streaming infrastructure and content distribution across West Africa. Under the executed framework, both parties have agreed to pool intellectual property, capital, and technical personnel into a newly formed limited liability company under Sierra Leonean law named “KrioStream LLC.” KrioStream will operate as an independent entity, with governance equally shared between Freetown and Waterloo. Profits, losses, and operational liabilities will be allocated pursuant to a detailed shareholders’ agreement.

Simultaneously, Freetown has been negotiating with the Sierra Rutile Co., a financially distressed competitor in mineral-based media storage solutions. After protracted discussions, Freetown’s board approved a transaction whereby Freetown will purchase 100% of Sierra Rutile’s issued shares for a combination of cash and Freetown convertible preference shares. Post-transaction, Sierra Rutile will become a wholly owned subsidiary of Freetown but will retain its operational branding, workforce, and management, subject to oversight by a newly formed strategic oversight committee appointed by Freetown.

Unrelated to the above, Freetown’s board is separately reviewing a potential combination with the Bo Hills Manufacturing GmbH (“Bo Hills”), a German hardware manufacturer specialising in broadcast equipment. The discussed proposal involves both companies ceasing to exist in their current legal forms and consolidating entirely into a new Sierra Leonean public limited company, “Freetown-Bo PLC,” which will issue new ordinary shares to shareholders of both predecessor entities. The combined entity intends to leverage integrated research capabilities and unified supply chain logistics.

• •The KrioStream arrangement involves cross-licensing of broadcast rights that are subject to ongoing regulatory review by the Sierra Leone National Telecommunications Commission.
• •The Sierra Rutile transaction includes an earn-out provision for Sierra Rutile’s founding shareholders, payable if Sierra Rutile achieves specified EBITDA targets within eighteen months.
• •The Bo Hills combination is contingent upon approval by the European Commission’s competition authority and a supermajority vote of Bo Hills’ stakeholder council, as required under German codetermination laws.
• •Freetown’s Chief Operating Officer holds a 15% silent partnership interest in Waterloo, which was not disclosed in the board minutes approving the KrioStream terms.
• •A minority shareholder of Freetown has filed a derivative suit alleging that the Sierra Rutile deal undervalues Freetown’s assets and breaches the directors’ fiduciary duties under Sierra Leonean corporate law.

• 1.Identify and analyse the three distinct corporate structuring strategies reflected in Freetown’s dealings with Waterloo, Sierra Rutile, and Bo Hills, respectively.
• 2.For each strategy, discuss the primary legal risks, regulatory hurdles, and governance challenges presented by the scenario under Sierra Leonean law and any applicable cross-border regulations.
• 3.Use the knowledge you have obtained from studying Corporate and Commercial law to evaluate the potential liabilities of Freetown’s board of directors, focusing on conflict of interest, duty of care, and shareholder approval requirements in connection with these transactions.

Question 215 marks

On January 10, 2020, Lion Rock Bank PLC entered into a facility agreement with Salone Tech Solutions Ltd (“STS”), a premier hardware retailer in Freetown. To secure a SLE 2,000,000 loan, STS authenticated a security agreement granting Lion Rock a security interest in “all present and after-acquired movable property, including equipment, inventory, and proceeds.” Lion Rock registered an initial notice in the Collateral Registry on January 12, 2020, specifying a registration period of four (4) years.

On May 1, 2023, STS sought to expand its data centre. Krio Finance House advanced funds specifically for the purchase of ten high-end industrial servers. STS took physical possession of the servers on May 5, 2023. Krio Finance House registered its notice in the Collateral Registry on May 18, 2023, describing the specific servers by serial number.

On June 1, 2023, Lumley Wholesalers Ltd agreed to supply STS with 500 units of “Z-Pro Laptops” (inventory) on credit. Under their agreement, Lumley retained a security interest in the laptops until full payment. The laptops were delivered to STS’s warehouse on June 3, 2023. Lumley Wholesalers registered their notice in the Collateral Registry on June 4, 2023. However, Lumley did not send any formal communication to Lion Rock Bank PLC regarding this new credit arrangement.

By January 15, 2024, STS began experiencing severe liquidity issues. Upon reviewing the Collateral Registry, Lion Rock Bank realized their initial registration from 2020 had lapsed on January 12, 2024, as it had failed to file any extension. Attempting to rectify this, Lion Rock filed an “Amendment Notice” to extend the period on January 20, 2024.

It has been discovered that three of the industrial servers financed by Krio Finance House were dismantled and their components “transformed” into a custom-built supercomputer product, integrated with other components owned by STS, for a specialised government contract.

• 1.Analyse whether the security interests of Lion Rock Bank, Krio Finance, and Lumley Wholesalers effectively attached to their respective collateral. In your answer, specifically cite the formal requisites under Section 6 and Section 12 of the Borrowers and Lenders Act, 2019.
• 2.Discuss the legal implications of Lion Rock Bank’s failure to file a Continuation Statement (Amendment Notice) before January 12, 2024. Evaluate the impact of this lapse on their priority status against the other creditors, with reference to Section 28 and Section 30 of the Act.
• 3.Evaluate the Priority of the competing claims:
  • Between Lion Rock Bank and Krio Finance House regarding the industrial servers, applying the 10-day rule for equipment under Section 49(1).
  • Between Lion Rock Bank and Lumley Wholesalers regarding the laptop inventory, applying the notification requirements under Section 49(2).

Question 315 marks

Nordic Pulse AB (Nordic), a high-tech Swedish conglomerate specialising in sustainable energy, is looking to penetrate the West African market. After an initial market assessment, the board decides on a multi-pronged entry into Sierra Leone.

First, Nordic purchases a 65% controlling interest in Freetown Energy Solutions (FES), an existing local power distributor. Instead of integrating FES entirely, Nordic maintains FES as a separate legal entity but overhauls its management. Simultaneously, Nordic partners with the Sierra Leone Port Authority to create a brand-new corporate entity, “Salone-Nordic Wind Ltd,” where both parties pool capital and technical expertise to build offshore wind farms, sharing governance and risks equally.

To support these operations, Nordic’s Swedish headquarters provides specialised turbine software to both FES and Salone-Nordic Wind. Nordic charges these local entities a subscription fee that is 40% higher than the fee charged to its European subsidiaries, citing “emerging market risk,” which significantly reduces the taxable profits of the Sierra Leonean entities.

While building a new manufacturing plant from the ground up in the Bo District, Nordic discovers that the site sits on a protected watershed. To stay on schedule, the project manager ignores local Environmental Permits and proceeds with construction. Furthermore, to staff the facility, Nordic brings in 50 Swedish engineers on “tourist visas” to avoid the lengthy Work Permit and “Labour Regulation” processes, asserting that international standards for expert mobility supersede local Sierra Leonean law.

Following a tax audit, the Sierra Leone Revenue Authority (NRA) discovered that Nordic had been paying Swedish corporate tax (currently at 20.6%) on the income generated in Freetown, claiming that because the parent company is Swedish, they are exempt from the Sierra Leonean 30% corporate tax rate. Nordic cites a non-existent “Global Investor Immunity” principle.

• 1.Identify and distinguish between the three specific forms/types of Foreign Investment Nordic has undertaken in Sierra Leone. In your answer, categorise the FES transaction, the Salone-Nordic Wind project, and the manufacturing plant in Bo using the terminology provided in the regulations.
• 2.Analyse the Tax Implications of Nordic’s software subscription fees. Define the specific regulatory concept that Nordic is potentially violating and discuss how the NRA might use “Market Conditions” to challenge these inter-company charges.
• 3.Critically evaluate Nordic’s compliance with Local Laws. Specifically, address:
  • The legal consequences of proceeding without Environmental Permits and the impact on Sustainable Development.
  • The validity of Nordic’s claim regarding Swedish engineers’ visas under local Labour Regulations and Work Permit requirements.
  • Discuss the applicability of Double Taxation Treaties (DTTs) in this scenario. Can Nordic unilaterally choose to pay the lower Swedish tax rate on income generated in Sierra Leone? Explain how DTTs function to Allocate Tax Rights between home and host countries.

Question 140 marks

Mr. Kamara is a wealthy businessman who owns 100% of the shares in Kamara Holdings Ltd, a company incorporated in Sierra Leone. The company carries on a construction business. In January 2024, Kamara Holdings Ltd entered into a contract with Mrs. Kargbo to construct a luxury residential house for NLe4,000,000. Under the contract, the house was to be built using specified high-quality materials.

During construction, Mr. Kamara personally instructed the company’s employees to use cheaper and inferior materials in order to increase profits. Shortly after completion, serious defects appeared in the house, including cracks in the walls, roof leaks and structural weaknesses. Mrs. Kargbo incurred substantial expense in repairing the defects.

At the same time, Kamara was involved in a separate dispute with his former business partner, Mr. Sesay, who had obtained a court judgment against him personally for NLe3,000,000.

Fearing that Sesay would enforce the judgment against his assets, Kamara transferred several valuable properties that he personally owned to a newly incorporated company called Sunrise Investments Ltd. Kamara’s wife and son were listed as the company’s shareholders and directors. However, Kamara continued to control the company, managed its affairs and made all significant decisions.

Shortly afterwards, Kamara Holdings Ltd became insolvent and was unable to pay its creditors. An investigation revealed that substantial sums of money had been transferred from Kamara Holdings Ltd to Sunrise Investments Ltd without any apparent commercial justification.

Mrs. Kargbo wishes to recover compensation for the defective construction of her house and seeks to hold Kamara personally liable. Mr. Sesay wishes to enforce his judgment against the properties now registered in the name of Sunrise Investments Ltd.

Kamara argues that both companies are separate legal entities and that neither he nor his family members can be held personally liable for the companies’ debts or obligations.

Advise Mrs. Kargbo and Mr. Sesay.

Question 240 marks

Mr. Bangura is a successful entrepreneur who intends to establish a business manufacturing and selling bottled fruit juices throughout Sierra Leone. He has consulted you as his lawyer regarding the most appropriate business structure to adopt. Mr. Bangura expects the business to generate annual profits of approximately Le 5 billion and intends to expand the business nationally within three years. Mr. Bangura is considering two possible structures: (1) Operating the business as a sole proprietor; or (2) Incorporating a private limited liability company of which he would initially own all the shares.

You advise him that under the current tax regime (i) A sole proprietor is subject only to personal income tax on the profits of the business, (ii) A company is subject to corporate income tax on its profits and (iii) Where the company distributes profits to shareholders as dividends, the dividends are also subject to tax in the hands of the shareholders.

Mr. Bangura is concerned that he may be exposed to substantial personal liability if the business incurs significant debts or if consumers suffer injuries from defective products. However, he is equally concerned about paying unnecessary taxes.

Six months later, before making a final decision, Mr. Bangura learns that a competitor has been sued for millions of Leones after consumers became ill from contaminated drinks. He becomes increasingly concerned about protecting his personal assets, including his family home and investments.

Mr. Bangura asks whether the tax consequences of incorporation justify operating as a sole proprietor despite the potential risks of personal liability.

Advise Mr. Bangura.

Question 330 marks

“Although a sale and an agreement to sell arise from the same contract, they produce very different legal consequences.”

Critically examine this statement with reference to the Sale of Goods Act 1893.