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[ESTABLISHING A BUSINESS ENTITY IN UGANDA]
ESTABLISHING A BUSINESS ENTITY IN UGANDA
1. INTRODUCTION Given that Uganda was a British colony, the English legal system and law are predominant in Uganda. Uganda's legal system is based on English Common Law and African customary law. However, customary law is in effect only when it does not conflict with statutory law. The laws applicable in Uganda are statutory law, common law; doctrines of equity and customary law are applicable in Uganda. These laws are stipulated by the Judicature Act Cap 13. Setting up a business in Uganda is quite straight forward as will be discussed below; 2. TYPES OF BUSINESS ENTITIES • Description of the types of entities available in Uganda through which to conduct business. Uganda has several business structures, and these include sole proprietorships, partnerships, private companies limited by shares or guarantee, public limited companies, unlimited companies, and statutory corporations. i) Sole Proprietorship : This is an entity owned and run by one individual. The individual who registers this entity is in direct control of the general management of the Business. These types of entities are registered under the Business Names Registration Act. ii) Partnerships : this is a relationship
share equal responsibility for the business, whereas in a limited partnership, at least one general partner oversees the day-to-day operations, and one or more limited partners contribute capital but have limited role in business management. Partners in the firm are jointly liable for all the debts and obligations of the Partnership . iii) Companies ; A Company is a distinct legal entity separate and set apart from its members. It obtains its own legal personality. It can sue and be sued. The structure requires appointment of a Board of Directors who may be no more than three and a Company Secretary, to manage the affairs of the Business. 3. MATTERS TO BE CONSIDERED WHEN CHOOSING A PARTICULAR BUSINESS ENTITY TYPE; 3.1. Sole Proprietors
The proprietor is entirely liable for the debts and obligations of the Business. So, the person intending to set up this type of entity should be aware of this fact. If the entity is unable to meet its obligations, then personal assets may be attached to cover the debts and obligations. For Tax purposes, the Tax Identification Number of this entity is the one that belongs to the individual.
3.2. Partnerships
The Partners are always jointly liable for the debts and obligations of the Business. The liability could extend to the legal representatives upon death of a Partner. These types of entities are synonymous with people from similar professions. They are very common among lawyers, auditors,
that subsists between two or more persons and not exceeding twenty, with a view of making profits and operating a business in common. Partnership can be either general partnerships or limited partnerships. In a general partnership, all partners
ILN Corporate Group – Establishing a Business Entity Series
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