Bunnya Erusa Namigadde v Bulime Cyrus and Another (Petition No. 41199 of 2024)
Observed later treatment
No later-treatment classification is recorded for this judgment.
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Holding
The Registrar held that a member cannot acquire shares as a transferee using company funds, as the company is a separate legal entity from its members. The executed transfer forms were erroneous; the transaction should have been structured as a surrender of shares under Regulation 32(3) of the Companies Regulations. The Registrar dismissed the petition without costs, finding that the matter was precluded from hearing due to a pending High Court case between the same parties addressing substantially the same issues.
Outcome
Petition dismissed on jurisdictional grounds due to pending High Court matter between the same parties
Facts
The Petitioner, a director and shareholder holding 20 shares in Rakai Community School of Nursing Limited, filed a petition alleging that the Respondents (her stepchildren, also directors holding 10 and 5 shares respectively) mismanaged the company following the death of her husband, the majority shareholder and managing director. She alleged financial impropriety including unauthorized withdrawals, failure to remit examination fees, and refusal to cooperate in company operations. During alternative dispute resolution proceedings before the Registrar, the Respondents agreed to sell their shares and resign as directors. The company engaged Knight Frank Valuers, which valued the company at UGX 5.6 billion. The Petitioner paid the Respondents UGX 560 million and UGX 350 million respectively for their shares using company funds. The Respondents later challenged this arrangement, arguing that the Petitioner should have used personal funds. The Respondents refused to sign surrender deeds after receiving payment. Counsel for the Respondents subsequently notified the Registrar that a High Court matter (Miscellaneous Cause No. 361 of 2025) between the same parties was pending hearing.
Issues
- Whether the transfer of shares to the Petitioner, having paid for the said shares using company funds, could properly be said to be a transfer of shares to the Petitioner.
- Whether the Registrar of Companies can hear a matter that is pending determination before a Court of law.
Orders
- Petition dismissed.
- No order as to costs.
Rules and key headnotes
Legislation cited (9)
- Companies Act Cap 106 s.81
- Companies Act Cap 106 s.83(1)
- Companies Act Cap 106 Regulation 22 Table A
- Companies Act Cap 106 Regulation 23 Table A
- Companies (Powers of the Registrar) Regulations SI No. 71 of 2016 Regulation 4(1)
- Companies (Powers of the Registrar) Regulations SI No. 71 of 2016 Regulation 4(2)(b)
- Companies (Powers of the Registrar) Regulations SI No. 71 of 2016 Regulation 34(1)
- Companies Regulations SI No. 74 of 2023 Regulation 32(3)
- Companies Regulations SI No. 74 of 2023 Regulation 32(4)
Cases cited (1)
- Barry Mpeirwe v Alsaco International Ltd (High Court Civil Suit No. 440 of 2014)
Full judgment
The original judgment as reported. Read the original PDF before relying on any passage.