Wakilii

Acellam v Julia Guest House Limited 2 Others (Petition Cause 5 of 2020)

Tribunal · [2023] UGRSB 15 · 2023 Petition Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Petition to the Registrar of Companies under the Companies Act seeking rectification of shareholding structure and investigation into company affairs
Decision
Petition dismissed; petitioner confirmed as no longer a member of the company

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Registrar held that the petitioner lacked locus standi to bring the petition under section 247 of the Companies Act because he was no longer a member of the company. The proper cause of action lay under Rule 8 of the Companies (Powers of the Registrar) Regulations 2016 for rectification of the register. The petitioner lawfully ceased to be a member when the company allotted shares to Margret Otti on 23 September 2008. The petitioner failed to prove forgery of his signature on the resolution transferring his shares.

Outcome

Petition dismissed; petitioner confirmed as no longer a member of the company

Facts

Robert Acellam was named as a subscriber to Julia Guest House Limited at incorporation in 1995 with 25 shares, alongside Julya Otti (50 shares) and Cedric Owor (25 shares). The 2nd respondent stated that Acellam and Owor were named as her grandchildren but never paid for their shares. On 23 September 2008, a resolution was registered transferring Acellam's and Owor's shares to Margret Otti, and a Form 10 was filed allotting 50 shares each to Julya Otti and Margret Otti. In 2017, annual returns showed a further change to 5 shares for Julya Otti and 95 shares for Margret Otti. Acellam filed a petition in 2020 alleging unlawful removal from the company, forgery of his signature on the 2008 resolution, and mismanagement of company property. He claimed he had been excluded from company affairs and that the respondents had been collecting rental income from company property without accounting to him.

Issues

  1. Whether the petitioner has a cause of action.
  2. Whether the petitioner lawfully ceased to be a member of the company.
  3. Whether the petitioner is entitled to the remedies sought.

Orders

  • Petitioner's cause of action was premised under the wrong law.
  • Petitioner was lawfully removed from the company.
  • The correct shareholders in the company are Margret Otti (95 shares) and Julia Otti (5 shares).
  • Each party to bear its own costs.

Rules and key headnotes

Company Law — Locus Standi — Petitions under Section 247 of the Companies Act
A petition under section 247 of the Companies Act 2012 may only be brought by a member of the company. A person who has ceased to be a member lacks locus standi to bring such a petition, and the proper remedy for challenging removal from the register of members is an application for rectification under Rule 8 of the Companies (Powers of the Registrar) Regulations 2016.
Company Law — Membership — Distinction between Subscribers and Allottees
A person may become a member of a company in two ways: by subscribing to the memorandum of association at incorporation, or by agreement to become a member subsequent to formation through allotment of shares. Subscribers who do not make capital contributions do not prevent the company from subsequently allotting shares to other persons who do contribute capital.
Company Law — Share Allotment — Procedure and Effect
Allotment of shares is the process by which a company accepts an offer to take shares and finds someone willing to become a shareholder. Where a subscriber at incorporation made no capital contribution, the company may lawfully allot shares to another person who does contribute capital without following the procedure for forfeiture of shares or making a call on shares.
Evidence — Forgery — Burden of Proof
A party alleging forgery of a signature must prove the forgery by adducing evidence, including a handwriting expert's report. In the absence of such evidence, where signatures on different documents appear similar to the naked eye, the allegation of forgery fails. The party alleging forgery bears the burden of proof; only if forgery is proved does the burden shift to the other party to disprove it.

Legislation cited (7)

  • Companies Act No. 1 of 2012 s.247
  • Companies Act No. 1 of 2012 s.85(1)
  • Companies Act No. 1 of 2012 s.61
  • Companies Act No. 1 of 2012 s.47
  • Companies (Powers of the Registrar) Regulations 2016 r.8
  • Companies (Powers of the Registrar) Regulations 2016 r.3
  • Evidence Act s.57

Cases cited (17)

  • Al Hajj Nasser N Ssebaggala v Attorney General (Constitutional Petition No. 1 of 1999)
  • Administrator General v Bwanika James & 9 Others (SCCA No. 7 of 2003)
  • Tororo Cement Co Ltd v Frokina International Limited (SCCA No. 2 of 2001)
  • Kebirungi v Road Trainers Ltd & 2 Others [2008] HCB 72
  • Attorney General v Oluoch (1972) EA 392
  • Ismail Serugo v Kampala City Council & Attorney General (Constitutional Appeal No. 2 of 1998)
  • Coffee Works Ltd v NPART (CACA No. 3 of 2000)
  • Elly B Mugabi v Nyanza Textiles Industries Ltd [1992-1993] HCB 227
  • Re Greenville College Limited (Company Cause No. 24 of 2005)
  • Nelson Ochaya Marie v Kamenge Deudonne & 2 Others (COCA No. 158 of 2015)
  • Re First Investor Corporation (1988) WWR 22
  • Lafras v Special Services Limited (Company Cause No. 11 of 2019)
  • Mathew Rukikaire v Incafex (Supreme Court Civil Appeal No. 3 of 2015)
  • Re Florence Land and Public Works Company (1885) LR 29 Ch D 421
  • Sri Gopal Jalan and Company v Calcutta Stock Exchange (1964) AIR 250
  • Cooke v Gull LR 8 EP 116
  • Read v Brown (1888) 22 QBD 31

Full judgment

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Acellam v Julia Guest House Limited 2 Others (Petition Cause 5 of 2020) 2023 UGRSB 15 (3 March 2023)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.