Wakilii

Monica Katuramu v Kaija and Sons Limited (Company Cause No. 20 of 2018)

High Court · [2018] UGHCCD 269 · 2018 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for orders to convene extraordinary general meeting with modified quorum requirements under Companies Act 2012
Decision
Application granted; applicant directed to hold extraordinary general meeting with modified quorum to enable company to accept new shareholders

Observed later treatment

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Holding

The High Court held that under section 142 of the Companies Act 2012, where it is impracticable to call or conduct a company meeting in the prescribed manner, the court may order a meeting to be called and conducted as it thinks fit. Where a two-shareholder company loses one shareholder through death, leaving only one shareholder unable to make quorum, the court may direct an extraordinary general meeting with modified quorum to enable the company to accept new shareholders through transmission or allotment of shares.

Outcome

Application granted; applicant directed to hold extraordinary general meeting with modified quorum to enable company to accept new shareholders

Facts

Kaija & Sons Limited was incorporated on 30 June 1972 with two shareholders, Kaija Katuramu and Monica Katuramu, each holding 50% of the shares. On 1 July 1979, Kaija Katuramu died. Following his death, the company was unable to make quorum for general meetings and board meetings to transact company business. An administrator was appointed for the late Kaija Katuramu's estate, but the company could not transmit his shares due to lack of quorum. The applicant Monica Katuramu sought court orders to convene an extraordinary general meeting with a quorum of one shareholder to enable the company to handle its affairs, including transmission or allotment of shares.

Issues

  1. Whether the court can order an extraordinary general meeting to be held with a quorum of one shareholder where the other shareholder has died and the company is unable to make quorum for meetings.
  2. Whether section 142 of the Companies Act 2012 empowers the court to vary quorum requirements where it is impracticable to call or conduct 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 — Court Power to Order Meeting Where Impracticable to Meet Quorum
Where it is impracticable to call a meeting of a company in any manner prescribed by the articles or the Companies Act, or to conduct the meeting in the prescribed manner, the court may order a meeting to be called, held and conducted in the manner the court thinks fit under section 142 of the Companies Act 2012.
Company Law — Quorum — Modification by Court Where Shareholder Death Prevents Quorum
Where a company has only two shareholders and one dies, leaving the surviving shareholder unable to constitute a quorum for general meetings, the court may under section 142 of the Companies Act 2012 direct that an extraordinary general meeting be held with a quorum of one shareholder to enable the company to transact necessary business including transmission or allotment of shares.
Statutory Interpretation — Companies Act — Court's Remedial Powers Under Section 142
Section 142 of the Companies Act 2012 confers on the court a broad discretion to fashion appropriate procedural orders where practical difficulties prevent a company from calling or conducting meetings in accordance with its articles or the Act, enabling the court to direct meetings to be held in such manner as it thinks fit.

Legislation cited (3)

Full judgment

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Monica Katuramu v Kaija and Sons Limited (Company Cause No. 20 of 2018) [2018] UGHCCD 269 (31 August 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.