PROCEDURE FOR OBTAINING LICENSE FOR HIRE PURCHASE BUSINESS IN UGANDA
Laws applicable include
THE HIRE PURCHASE ACT, 2009
THE HIRE PURCHASE REGULATIONS, 2012.
THE CONTRACT ACT
Among others
The terms below according to the Act in this context mean as follows
Bailment” means a delivery of goods or movable personal property by one person to another in trust for the execution of a special object upon or in relation to goods beneficial either to the bailor or bailee or both and upon a contract, express or implied, to perform the trust and carry out the object and either redeliver the goods to the bailor or dispose of the goods in conformity with the purpose of the trust;
Hire purchase agreement” means an agreement for the bailment of goods under which the bailee may buy the goods or under which the property in the goods will or may pass to the hirer;
Licensing authority” means the Commissioner for Internal Trade as declared in the Hire Purchase (Declaration of Licensing Authority) Order, 2011;
Only a company registered in Uganda is qualified to be licensed to carry on hire purchase business.
1. Register accompany limited by shares of at least share capital of one hundred million Uganda shillings
2. Prepare drafts of intended hire purchase agreements or contracts/
3. Certify certificate of incorporation of the company at registrar of companies
4. Certify the memorandum and articles of association of the company
5. Prepare the following,
The statements showing the financial status of the company
evidence that a company has a minimum share capital of one
hundred million shillings; and
any other information that the licensing authority may require
the audited accounts of the company for the previous year
tax clearance from Uganda revenue authority
evidence of filling annual returns at company registry
The application fees
6. Obtain application form for a hire purchase license in triplicate(three copies) and state—
• the name, the telephone and the fax numbers, the postal, the email and the physical addresses of the company;
• the tax identification number and the date of registration of the company;
• the place where the company carries on or proposes to carry on a hire purchase business;
• the directors of the company and their qualifications;
• the share capital of the company available for hire purchase business
• the nature of goods that the company is to hire uses
• Any other information that is relevant to the application.
7. Attach all the above prepared document on the application and submit it to the licensing authority (the Commissioner for Internal Trade at ministry of trade )
8. In establishing the financial condition of an applicant under section 20 (5) of the Act and regulation 5, the licensing authority shall be guided by—
the share capital of the company as disclosed in the annual returns of the company;
the audited accounts of the company;
the tax obligations of the company;
the financial and the bank statements of the company for the previous twelve months; and
the actual stock in trade of the company
9. The licensing authority (the Commissioner for Internal Trade at ministry of trade ) shall review the application and make a decision within 30 days of the date of receipt of the application.
10. Where the licensing authority is satisfied that the applicant is a company qualified to carry on a hire purchase business ,A hire purchase licensee shall be granted indicating—
the name and the registration number of the company;
the postal, the email and the physical address of the company;
the nature of the hire purchase business that the company carries on; and
The conditions, if any, under which the company shall carry on the hire purchase business.
11. The applicant shall then collect the license and commence hire purchase business in Uganda
12. Where the licensing authority refuses to grant a hire purchase license or grants a hire purchase license subject to conditions, the licensing authority shall notify the applicant of its decision within fourteen working days of making the decision.
13. Where the application for the license has been rejected and the applicant is dissatisfied with the decision of the controlling authority, he or she may appeal against the refusal to the Minster of Trade in Uganda
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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