HOW TO PURCHASE AND TRANSFER SHARES IN SINGLE MEMBER COMPANY IN UGANDA

HOW TO PURCHASE AND TRANSFER SHARES IN SINGLE MEMBER COMPANY IN UGANDA.

Governing law,

Section 87 of companies Act 2012

• Shares are units of ownership interest held by a person in particular company
• A transferee is the person to whom shares are being transferred to.
• A Transferor is a person who is transferring shares to somebody else

The shares of any member in a company are movable property transferable in the manner provided by the Articles of the company

In Uganda today one person can incorporate a company alone in that all the shares belongs to only him.

A Single member company is a company in which all shares are held/owned by one person.

Unless otherwise below is the procedure,

• Conduct search at company registry to ascertain the existence of the company, the liabilities if any, ownership, and its general status as far liquidation is concerned,
• Have look at company documents i.e. memorandum and articles of association, company form 20 previously filled return of allotment, previously filled annual returns, minutes of AGM M meetings among others.
• While perusing through Articles and memorandum of Association look for how that company is governed.
• Assuming all is well with your due diligence, proceed to negotiate for the number of shares you want to buy from the shareholder or his authorized agent.
• In the event that you agree on the terms, proceed to reduce those terms and conditions in writing (shares purchase/sale agreement).
• After the shares sale/purchase agreement is made the shareholder must sign a transfer of share form/instrument transferring the agreed number of shares to the purchaser/transferee and the purchaser/transferee has to accept by appending his signature.
• Thereafter the transferee submits the fully executed transfer of shares form to gather with the share purchase. Sale agreement to the company for purposes of making the new changes accordingly or the transferor requests the same to be done.
• The company shall then proceed to transfer the shares to the purchaser/transferee as per transfer form.
• The company shall pass a special resolution for change of status from single member company to private company and alter its articles accordingly within thirty days of transfer of shares or further allotment of shares;
• The company shall appoints / elect one or more additional directors within fifteen days of date of passing of the special resolution and
• The company shall then notify the registrar of companies about the appointment of additional director of the company.
• The purchaser or his authorized agent checks with the company to pick certificate of shares in respect to the purchased shares.
• The SPECIAL RESOLUTION, transfer of shares, returns of allotment, amended ARTICLE AND MEMORANDUM OF ASSOCAITION OF THE COMPANY among others should be assessed at REGISTRAR OF COMPANIES for purposes of paying stamp duty and filling fee.
• Upon assessment, pay accordingly to the bank advised and submit all the documents together with payment receipts to registrar of companies at URSB and you should told when to pick company copies.
• When the documents are submitted at company registry, the company file at company registry shall be retrieved from the store and taken to the registrar for consideration.
• The document shall be reviewed by registrar of companies and registered accordingly.
• Go to the Registrar’s office on the day you were told to pick company registered/filled documents.

approximate cost:5%-10% of the value of the shares purchased but not less than ugx 1000,000

Author is A regional transactions legal consultant (ADVOCATE) at NOA REGIONAL ASSOCIATED ADVOCATES AND LEGAL CONSULTANTS
Email address: onlinetransactionconsultancy@gmail.com.

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NOTE: whereas the author has made necessary efforts to ensure the accuracy of this post, it is not intended to provide specific legal advice to a particular individual as individual situations may differ.

For specific technical / legal transaction advice on this subject matter and related subject, you may contact the author at online consultancy fee, or contact any transaction legal consultant of your choice.
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