Wakilii

In the matter of Fresh Horizons Limited & Eastern Creameries Limited (Company Cause No. 16 of 2018)

High Court · [2018] UGHCCD 254 · 2018 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application under Companies Act 2012 and Civil Procedure Act seeking court order to deal with shares of liquidated shareholder
Decision
Application granted; company directed to hold meeting to allot shares

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court granted an application enabling a company to hold a meeting to deal with shares held by a liquidated shareholder. Where a two-shareholder company cannot hold meetings because one shareholder ceased to exist through liquidation, the court may under section 142 of the Companies Act order a meeting be called and conducted as the court thinks fit.

Outcome

Application granted; company directed to hold meeting to allot shares

Facts

Fresh Horizons Limited was incorporated on 4 May 2013 with two shareholders: Eastern Creameries Limited holding 70 shares (unpaid) and Adonai Elohim Limited holding 30 shares. On 27 May 2016, Eastern Creameries Limited resolved by special resolution to voluntarily wind up. The liquidation was completed and Eastern Creameries was dissolved and struck off the register. The 70 shares held by Eastern Creameries in Fresh Horizons were left in abeyance and never dispensed with before dissolution. Fresh Horizons now operated with only one shareholder and could not convene a general meeting in the prescribed manner to deal with the 70 shares. The former shareholders of Eastern Creameries agreed the shares should be transferred to Stephen Wakhweya but the liquidator and official receiver advised their powers had ceased and court intervention was required.

Issues

  1. Whether the court can order a company meeting where one shareholder has been liquidated making it impracticable to call a meeting in the prescribed manner.

Orders

  • The applicant is directed to hold a meeting for the purpose of allotting the 70 shares to Wakhweya Stephen as agreed upon by the former shareholders of Eastern Creameries Limited.
  • Application granted.

Rules and key headnotes

Company Meetings — Impracticability — Court's Power to Order Meeting
Where it is impracticable to call a meeting of a company in the manner prescribed by its articles or the Companies Act, the court may under section 142(1) of the Companies Act 2012 order that a meeting be called, held and conducted in the manner the court thinks fit.
Shares — Allotment — Shares Held by Liquidated Company
Where a company has two shareholders and one shareholder has been liquidated and dissolved, leaving only one shareholder unable to convene a general meeting, the court may exercise its powers under section 142 of the Companies Act 2012 to enable the company to deal with the shares formerly held by the dissolved shareholder.
Liquidation — Powers of Liquidator and Official Receiver After Dissolution
The powers of the liquidator and official receiver in respect of a company cease upon the dissolution of that company, and any subsequent dealing with the dissolved company's assets requires court intervention.

Legislation cited (6)

Full judgment

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

In the matter of Fresh Horizons Limited & Eastern Creameries Limited (Company Cause No. 16 of 2018) [2018] UGHCCD 254 (2 July 2018)
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.