Mercy Kainobwisho, the URSB Registrar General
MPs have quizzed Attorney General, Kiryowa Kiwanuka on the proposal by Government to strike off idle companies from the register over concerns that corruption within Uganda Registration Services Bureau (URSB) would disadvantage some businesses in the country.
In The Companies Amendment Bill 2022, Government is seeking to insert a new clause in Section 265A in Principal Act to give powers to the Registrar at the request of the company or his or her own accord, cancel the registration of the company upon satisfaction that the company is no longer carrying out business.
Government is also seeking to insert another provision in section 265A(2) to mandate the Registrar to give notice to the company of the intention to cancel the registration of the company and strike it off the registrar and publish the notice in the gazette.
During the scrutiny of the bill, Kiryowa said the provision is intended to empower the registrar to clean and keep updated register without dormant or defunct entities, adding that although the practice has been around, the latest amendment is intended to provide for giving notice before deregistration.
“But also a defunct company on the register can do a lot of wrong because it can pop up, do an activity because it has legal existence and disappear and because it has been defunct for a long time, you aren’t able to trace them yet the international requirements require us to know where the company is doing business and what business it is doing,” said Kiryowa.
Simon Opolot (Kanyum County) tasked the Attorney General to ensure that staff who work with registrar of companies, aren’t involved in fraudulent activities by conniving with unauthorized persons to alter some of the registration documents of a given company.
“I would like to implore you to put in place provisions that takes care of this by instituting a penalty in case of the staff of the registrar dealing with a fraudulent person to alter registration documents without the authorization of the companies because I don’t want us to have an act that is outward without looking inward to claim as if it is angels who are providing the service, we also have satans inside there,” said Opolot.
Ibrahim Ssemujju (Kira Municipality) questioned if there are provisions to notify the public about companies winding up, especially companies formed to target a government contract, citing the company awarded Shs24Bn Mukono-Katosi Road, but wound up after receiving the money and no work was done.
He said, “We have had companies formed eyeing one government transaction, sometimes they close and run away. Are there other procedures beyond because you may have the Registrar conniving with a company coming here like the case of katosi, someone forms a company for one single transaction they become rich and the registrar strikes it off and you can’t trace it. Is there a procedure even in any other law beyond what the rules are proposing that make everybody know there is a process of this company going away?”
Mercy Kainobwisho, the URSB Registrar General informed the Committee that all the concerns of corruption are addressed in the parent Act but the new amendments are intended to ease the process of closing a company.
“The current law is limiting and the reason we are amending is to simplify the process especially for companies that have no property and yet have to be subjected to the Insolvency Act 2012,” said Kainobwisho.
Parliament is expected to hold a special sitting on Monday to consider the seven bills including; The Trustees Incorporation (Amendment) Bill, 2022, The Anti-Terrorism (Amendment) Bill, 2022, The Anti-Money Laundering (Amendment) Bill, 2022, The Cooperative Societies (Amendment) Bill, 2022, The Partnerships (Amendment) Bill, 2022, The Companies (Amendment) Bill and The Insolvency (Amendment) Bill, 2022.
This is intended to ensure that Uganda beats the 3rd September deadline the country has to enact laws to combat money laundering and terrorism financing as per international standards.
