Wakilii

Bemuga Forwarders Limited (Companies Cause 33 of 2024)

High Court · [2025] UGCOMMC 15 · 2025 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to rectify the company's register of members by removing an untraceable shareholder
Decision
Application granted with modification — shares to be held in trust by the company rather than transferred to the applicant shareholder

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court granted the application to rectify the company register by removing an untraceable shareholder. The Court ordered that the shareholder's shares revert to the company to be held in trust for him rather than to the majority shareholder who made the application, balancing the need for business continuity with protection of the absent shareholder's property rights. If unclaimed after three years, the shares may be sold after valuation and public notice.

Outcome

Application granted with modification — shares to be held in trust by the company rather than transferred to the applicant shareholder

Facts

Bemuga Forwarders Limited was incorporated in December 1995. In October 2016, the majority shareholder Dr. Ben Mugasha transferred 20% (3,600 shares) to Ronald Kanyerezi in consideration of technical input and business growth, subject to quarterly review. Kanyerezi failed to deliver the promised technical input and business growth. He left the company without notice and disappeared. The company attempted to reach him through his phone number (0702029651) without success. His family in Mbarara confirmed he had left Uganda for greener pastures. The company discovered that Kanyerezi had been involved in causing a loss of UGX 2,022,312,313 between December 2021 and June 2022. Police investigations were ongoing against him (referenced KMP/E/CID/06/254/2024) regarding a loss of UGX 1,600,000,000. When confronted about the losses, Kanyerezi switched off his phone and went on the run. The company removed him as Chief Executive Officer. The company's operations were hindered because it could not conduct transactions without resolving the shareholding issue.

Issues

  1. Whether the shares of Ronald Kanyerezi Mark Oliver should revert to Dr. Ben Mugasha, the majority shareholder in the Company.

Orders

  • The Registrar of Companies is directed to rectify the register to remove Ronald Kanyerezi Mark Oliver from the Register.
  • Ronald Kanyerezi's 3,600 shares revert to the company and be held in trust for him until they are claimed.
  • Any dividends declared during that period shall also be held in trust for him.
  • In the event that the shares remain unclaimed for 3 years, the company will be at liberty to sell them to an interested buyer after valuation by a qualified person and publication of a notice of sale in a newspaper of wide circulation.

Rules and key headnotes

Company Law — Register of Members — Rectification — Untraceable Shareholders
Where a shareholder has become untraceable and his continued presence on the register hinders the company's operations, the court has jurisdiction under section 125 of the Companies Act to rectify the register by removing the untraceable shareholder, notwithstanding that the Act is silent on the specific remedy for untraceable shareholders.
Company Law — Register of Members — Rectification — Jurisdiction and Scope
The court's jurisdiction to rectify a company register under section 125 of the Companies Act is not limited to cases where a name has been entered improperly but extends to cases where a name stands on the register without sufficient cause.
Company Law — Shares — Property Rights — Untraceable Shareholders — Protection
When ordering rectification of the register to remove an untraceable shareholder, the court must balance the interests of the untraceable shareholder, the other shareholders, and the company. Shares being property, the court will order that the untraceable shareholder's shares revert to the company to be held in trust for him rather than be transferred to another shareholder, thereby protecting the absent shareholder's property interests while allowing business continuity.
Company Law — Shares — Sale of Unclaimed Shares — Procedural Safeguards
Where shares of an untraceable shareholder are held in trust by the company and remain unclaimed for three years, the company may sell them to an interested buyer, but only after the shares have been valued by a qualified person and notice of the sale has been published in a newspaper of wide circulation.

Legislation cited (6)

Cases cited (2)

  • Nyanza Mines (Tanganyika) Limited v The Registrar of Companies and Bridge of Balgie Limited (Miscellaneous Civil Application No. 684 of 2019)
  • In the Matter of Uganda Baati Limited (Company Cause No. 23 of 2024)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Bemuga Forwarders Limited (Companies Cause 33 of 2024) [2025] UGCommC 15 (25 February 2025)
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.