The success of the Companies Act 2012 came into place 2012 and before Uganda was regulated

by the Companies Act 1961 (a product of the colonial era designed in line with the English
Companies Act 1948. The new act has helped and registered success economically in Uganda.

The companies Act 2012 signify a constructive development towards the legal regime of
company law in Uganda. The Act has provided for a cod of corporate governance 1in the
companies Act and Table F. the code divides responsibility between the chairperson of the board
and the chief executive officer. It goes ahead to stipulate the qualification of the directors so as to
facilitate proper management of the company .however it is worth noting that the code is only
enforceable against a public company however a private company can adopt the code 2. A
company that has adopted the code of corporate governance shall file a statement of compliance
with the registrar and capital markets authority as provided for by section 14(4)3

The new companies Act 2012 has widened the re-registration scope for companies. This is the
acknowledgement through the appreciation of sections 23,24,27,28 and 354 where a private
public company may re-register as a public company, a limited liability company as unlimited
liability company, unlimited liability company as Limited Liability Company and a public
company as a private company. This has eased the re-registration in case a company desires to
change status, however it should be noted that the re-registration does not affect the rights or
liabilities of the company in respect of any debt or obligation incurred or any contract entered
into, by, with or on behalf of the company before registrations.

The companies Act 2012 codifies the doctrine of lifting the corporate veil .lifting the corporate
veil is defined as disregarding the corporate personality of a company in order to apportion
liability to a person who carries out any act5. The act operationalises this stipulating that the High
court may where a company or its directors are involved in acts including tax evasion, fraud or
where, save for a single member company, the membership of a company falls below the
statutory minimum lift the corporate veil6.this makes the new company Act 2012 as good law

1
Section 14
2
Section 14(2)
3
Companies Act 2012
4
Companies Act 2012
5
Section 2 of the companies Act
6
Section 20
because this a stipulation that did not exist in the previous Companies Act and hence preventing
the use of their selfish interests and hide under the company as it is a separate entity.

The companies Act 2012 assents the essential role of a company secretary, as a person who has
authority to bind the company in matters concerned with administration. The Act provides that
every company shall have a secretary7. The act forbids the sole director from being a secretary of
.in exception of a single member company, it is mandatory that every company has a company
secretary as provided for by section 187(3) of the company Act. It goes ahead and stipulates the
qualification of a company secretary8 and the duties are the duties are provided for in table F of
the company Act 2012.

The companies Act 2012 has increased the number of members to one hundred members which
was not the case with the previous laws governing companies in Uganda. This is stipulated in the
Act9 and the definition of a private company therein is wider and broad compared to the previous
legislations governing companies in Uganda. The act defines a private company as to mean a
company which by its articles restricts the rights to transfer not only its shares but also its
securities10and this renders the new company Act as good law and adequate.

The companies Act 2012 has introduced a requirement that the resolution for reducing share
capital shall be published in the Gazette and a newspaper of wide circulation 11.The act has
retained the position that a company maybe special resolution and upon petitioning for an order
to confirm the reduction, reduce share capital12

The new companies Act 2012 has brought in an aspect that there is no need to list the numerous
business objects in the memorandum. The act provides for requirements to the memorandum that
it may also state the objects of the company13the effect of the provision in Section 7(1)c is

7
Section 187(1)
8
Section 190
9
Section 5(1)b
10
Section 5(1)a
11
Section 77(1)
12
Section 76 and 77
13
Section 7(1)c
asserted in section 7(5) which stipulates that notwithstanding sub section(1)c , where the
companys memorandum states the object of the company is to carry on business as a general
commercial company that the memorandum shall state that the object of a company is to carry
on trade or business whatsoever and company has power to do all such things as are incidental or
conducive to the carrying on of any trade or business by it.

The act introduces a new provision in regards to the companys transactions and the other party.
a party to a transaction with a company is not bound to inquire whether it is permitted by the
companys memorandum or as to any limitation on the powers of the board of directors to bind
the company or authorize others to do so14

The companies Act has made it an obligation on all limited liability companies upon registration
to add the initials LTD or the word limited at the end of its name so as help persons transacting
with the company to know the status of the company and liability incase of breach.

In conclusion therefore the new companies Act of 2012which before enactment Uganda
continued to rely on legal frameworks designed and implemented during the colonial era. Such
dependency is noticeable in Ugandas system of company law, a vital part of the legal
framework within which business is conducted yet until 2012, was regulated by the Companies
Act 1961 which was a product of the colonial era designed in line with the English Companies
Act 1948. And with the new companies Act of 2012 it changed many unanswered questions and
hence worthy to note that it was good law to the legal frame work governing companies in
Uganda.

14
Section 53 of the company Act
REFERENCE

COMPANIES ACT 2012

THE 1995 UGANDAN CONSTITUTION