Wakilii

In the matter of Machame Health and Leisure Club Limited (Company Cause No. 19 of 2018)

High Court · [2018] UGHCCD 246 · 2018 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for court order to convene extraordinary general meeting of company with sole shareholder constituting quorum
Decision
Application granted; extraordinary general meeting to be held with sole shareholder constituting quorum

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Where a company had two shareholders and one died leaving the survivor unable to constitute a quorum for general meetings, the court exercised its discretion under s.142 of the Companies Act 2012 to order an extraordinary general meeting with the sole shareholder constituting the quorum for the purpose of accepting new shareholders through transmission or allotment of shares.

Outcome

Application granted; extraordinary general meeting to be held with sole shareholder constituting quorum

Facts

Machame Health and Leisure Club Limited was incorporated on 5 January 2006 with two shareholders, Irrah Muwanga and Emmanuel Sedduge Muwanga, each holding 50 shares. Both served as the only two directors. On 14 March 2015, Emmanuel Sedduge Muwanga died from cardiac failure. Irrah Muwanga, as widow and administratrix of his estate, administered his 50 shares but remained as sole director and sole shareholder. Following the death, the company was unable to make sufficient quorum for general and board meetings to transact company business. The applicant sought court orders to convene an extraordinary general meeting with herself solely constituting the quorum.

Issues

  1. Whether the court may order an extraordinary general meeting to be held with a sole shareholder constituting the quorum where the death of the other shareholder makes it impracticable to call a meeting in the prescribed manner.

Orders

  • The applicant is directed to hold an Extra General meeting for the purpose of accepting the new shareholder(s) through transmission of shares or allotting of shares to any other shareholder.
  • The costs of this application are to be met by the company.

Rules and key headnotes

Company Law — General Meetings — Quorum — Court Power to Order Meeting When Impracticable to Call Meeting in Prescribed Manner
Where it is impracticable to call a company meeting in the manner prescribed by the articles or to conduct the meeting in the prescribed manner, the court may under s.142 of the Companies Act 2012 order a meeting to be called, held and conducted in the manner the court thinks fit.
Company Law — General Meetings — Sole Shareholder — Death of Co-Shareholder
Where a company has only two shareholders and one dies, leaving the survivor unable to constitute a quorum for general meetings, the court may exercise its discretion under s.142 of the Companies Act 2012 to permit the sole remaining shareholder to constitute the quorum for an extraordinary general meeting to accept new shareholders.

Legislation cited (3)

Full judgment

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In the matter of Machame Health and Leisure Club Limited (Company Cause No. 19 of 2018) [2018] UGHCCD 246 (25 September 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.