REGISTERING A SINGLE MEMBER COMPANY IN UGANDA: NEW DEVELOPMENTS IN THE LAW
Since 2012 when company law in Uganda was reformed and a new legislation, The Companies Act 2012 put in place, several changes were introduced in relation to company formation and management. One of the landmark changes was the introduction of a single member company. Unlike before 2012 where every company had to be constituted of at least two members, a single person, be it individual (natural person) or corporate (artificial entity) may register a company as sole member and shareholder.
S.4 of the Act provides that any one or two persons may for lawful purposes form a company by subscribing their names to the memorandum of association or registering the company as provided under the Companies Act. Single Member Companies have the Companies (Single Member) Regulations, 2016 which provide the procedure for their registration.
Registration is effected by submitting the relevant registration form to the registrar. The first requirement is in respect to the name of the company. Apart from the usual requirements that a company name should not be undesirable or misleading, the law also makes it mandatory for every single member company to add the initials “SMC LTD” or the words “Single Member Company Limited” at the end of its name.
The company must also submit its memorandum and articles of association. The memorandum of association is the key document of the company that spells out its activities/ the purpose for which the company is formed as well as its share capital and liability. The law provides a standard form memorandum of association of a single member company in the form set out in Table B of the Second Schedule to the Act which may be adopted by the company with or without modifications.
The law also provides standard form articles of association of a single member company in the form set out in the First Schedule to the Companies (Single Member) Regulations, which may be adopted by the company with or without modifications. Articles of association contain the internal regulations of the company and provides for matters like; shares and share capital, increase of share capital, transfer and transmission of shares, meetings, directors, secretary, dividends and reserves, accounts, audits, indemnity, the use of the company seal and notices among others .
Additional registration documents include the statutory declaration of compliance by the director or advocate engaged in the formation of the company, statement of nominal share capital and the particulars of directors including the particulars of a nominee director and alternate nominee and secretary of the company.
The law requires that a nominee director or alternate nominee director shall be an individual; not being the secretary of the company or the single member of the company. The nominee director’s role is to manage the affairs of the company in case of death of the single member until the transfer of shares to the personal representative of the single member. Other roles include; notifying the registrar of the death of the single member, providing particulars of the personal representative, transferring the shares to the personal representative of the single member; and calling the general meeting of the member to elect directors. An alternate nominee director on the other hand is that individual nominated by a single member to act as nominee director in case of non availability of the nominee director.
Upon registration of a company as single member company, it is issued a certificate of registration in its name with the initials “SMC LTD” or the words “Single Member Company Limited” at the end of its name.
By Ninsiima Irene: Email: firstname.lastname@example.org
The Author is a practicing Advocate of the High of Uganda with Angualia, Busiku, & Co Advocates