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[ESTABLISHING A BUSINESS ENTITY IN UGANDA]
v) On disposal of their shares, they are required to notify the Registrar of Companies by signing and submitting share transfer forms confirming the change in ownership. vi) Shareholders are required to pay withholding tax of 6% on the amount of dividends received (if local/Ugandan shareholders and 15% in the case of foreign shareholders on dividends received. vii) Shareholders are further required to get the approval of External Auditors, Appoint Non-Executive Directors and approve the audited financial statements for the company on annual basis. viii) In the case of NGO’s, Directors are required to file Annual Returns with the NGO Bureau. The Annual Returns include, among other things, changes in Directorships, membership, financial status and funders, staffing issues. They are also required to furnish the NGO Bureau with information in respect to the strategic and key operational issues. MINORITY SHAREHOLDERS’ RIGHTS AND PROTECTION . i) An oppressed minority member can seek redress from the Registrar of Companies 50 . The procedure is by filing a petition before the Registrar of companies with supporting evidence. The petition would then be served on all the respective parties. 51
The Registrar of Companies may also refer any matter arising in the exercise of his or her power to the High Court for determination and decision. ii) A minority shareholder could seek redress by filing a petition in the courts of law 52 for example in cases where the company’s affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of its members including the minority shareholder. iii) Minority shareholder rights can also be protected under a Shareholders Agreement. These are also common in Uganda where there are several stakeholder groups with different interests. In most cases, the provisions of this Agreement, takes precedence over what is provided for under the Articles of Association.
4. FOREIGN
INVESTMENT,
THIN AND
CAPITALIZATION,
RESIDENCY
MATERIAL VISA RESTRICTIONS
• Any significant barriers to entry for an offshore party Lease and ownership of land Non-citizens cannot own land under freehold or mailo tenure, but can own a lease by virtue of the law. 53 These may be obtained through the Uganda Land Commission and or a District Land Board.
50 Section 245(1) of the Companies Act, Cap 106
52 Ibid. Section 246
51 Regulation 26 of the Companies (Powers of the Registrar) Regulations S.I No71 of 2016
53 Section 41(4) Land Act, Cap 236
ILN Corporate Group – Establishing a Business Entity Series
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