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In the matter of an application to rectify the company register by Uganda Baati Limited (Company Cause 23 of 2024)

High Court · [2024] UGCOMMC 274 · 2024 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Ex parte application to rectify company register under Companies Act s.125
Decision
Register rectified; untraceable shareholders removed; shares held in trust; company permitted to update OBRS records

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Holding

The court granted the application to rectify the company register under section 125 of the Companies Act 2012. Where 20 shareholders of a public company could not be traced despite reasonable efforts through newspaper notices and correspondence, the court directed the Registrar to remove them from the register. Their 10,387 shares were ordered to revert to the company to be held in trust pending the shareholders' reappearance. The court permitted the company to update its records on the Online Business Registration Services system using the updated register containing details of the 13 traceable shareholders.

Outcome

Register rectified; untraceable shareholders removed; shares held in trust; company permitted to update OBRS records

Facts

Uganda Baati Limited was incorporated on 10 August 1964 as a public company with more than 50 shareholders. Over the years, share transfers reduced the membership to 33 shareholders as of 23 May 2024. The company's share capital is UGX 4,000,000 divided into 4,000,000 shares, with 1,372,899 shares issued to the 33 shareholders. The company made several attempts through newspaper notices, phone calls, and emails to request shareholders to update their records with the company secretary. Only 13 shareholders responded and updated their details. The remaining 20 shareholders could not be traced, and the company did not possess their national identification documents and current contact details. This inability to trace all shareholders prevented the company from updating its records on the Online Business Registration Services system, which in turn hindered the company's operations including the registration and obtaining of board and shareholder resolutions.

Issues

  1. Whether the court should direct the Registrar of Companies to rectify the company register by removing 20 shareholders who cannot be traced.
  2. Whether shares held by untraceable shareholders should revert to the company to be held in trust.
  3. Whether the Registrar of Companies should approve the applicant's update of its records on the Online Business Registration Services system.

Orders

  • The Registrar of Companies is directed to rectify the records of the company and update the register of members by removing the 20 shareholders listed who cannot be traced.
  • 10,387 ordinary shares belonging to the twenty untraceable shareholders shall revert back to the Company to be held in trust for the shareholders until they can be claimed; and should the company declare dividends while in trust of these shares, the same shall be reverted to the shareholders after claiming the shares.
  • Following the reversion of the shares to the Company, the shareholding percentage in the Company shall be recalculated and updated accordingly.
  • The Registrar of Companies is directed to approve the applicant's update of its records on the online Business Registration Services (OBRS) using the Company's register of members dated 23 May 2024 containing the details of the 13 shareholders whose records are up to date with the company.
  • The Applicant is directed to continue efforts to locate the 20 shareholders whom it holds shares in trust for pursuant to this Order.
  • No order as to costs.

Rules and key headnotes

Company Law — Register of Members — Rectification — Removal of Untraceable Shareholders
Where members of a company disappear and can no longer be traced despite reasonable efforts, the court may exercise its statutory power under section 125 of the Companies Act 2012 to order rectification of the register to remove such members, allowing the available members to conduct the affairs of the company and avoid interregnum.
Company Law — Share Capital — Shares of Untraceable Members — Reversion to Company
Where shareholders cannot be traced, the court may order their shares to revert to the company to be held in trust for the shareholders until they can be claimed, with any dividends declared during this period to be held in trust for the shareholders.
Company Law — Company Register — Statutory Duty — Registrar of Companies — Online Business Registration Services
The court has jurisdiction under section 125 of the Companies Act 2012 to direct the Registrar of Companies to approve a company's update of its records on the Online Business Registration Services system where rectification of the register is necessary for the company to conduct its business effectively.
Company Law — Judicial Intervention — Non-Interference Principle — Exceptions
As a principle of law, the court will not interfere in the activities or decisions of a company save in limited circumstances; however, where a company faces practical obstacles to its operations due to untraceable members, the court is obligated to step in upon request to facilitate the company's continued functioning.

Legislation cited (5)

Cases cited (7)

  • Re Nico Ltd (Miscellaneous Application No. 33 of 1995)
  • In the Matter of Kasita Estate Ltd (1982) HCB 107
  • Re Buyuni Company Limited (HCMC 508 of 2020)
  • In the Matter of Ecole Francaise De Kampala Limited (Company Cause No. 9 of 2022)
  • Kings Court Trust Limited and Others v Lancashire Cleaning Services Limited [2017] EWHC 1094 (Ch)
  • Musa Misango v Eria Musingure and Others [1966] EA 390
  • Samuel Gutu Macharia and 4 Others v Patrick G. Mwangi and 7 Others [2017] EKLR

Full judgment

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

In the matter of an application to rectify the company register by Uganda Baati Limited (Company Cause 23 of 2024) [2024] UGCommC 274 (30 August 2024)
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.