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Beneficial Ownership Legislation in Uganda: Coverage of All Legal Entities and Arrangements
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It appears that beneficial ownership legislation in Uganda should cover all legal entities and arrangements. According to recent case studies, all types of organizations are susceptible to financial misconduct or economic crimes.
Importance of Covering Trusts in Beneficial Ownership Legislation
The use of trusts by corrupt government officials has been exposed through leaks such as the Pandora Papers and Paradise Papers. This highlights the need for more scrutiny into the beneficial owners of these legal arrangements.
Types of Legal Entities and Arrangements to be Covered
A new BO law in Uganda should cover all types of legal entities and arrangements, including:
- Limited Liability Companies (LLCs): companies that provide limited liability protection to their owners.
- Limited Liability Partnerships (LLPs): partnerships where some or all partners have limited personal liability.
- Trusts: arrangements where a trustee holds assets for the benefit of others.
- Foundations: organizations established for charitable, educational, or other purposes.
- Foreign Companies: companies registered outside of Uganda but operating within its jurisdiction.
- Multinational Corporations: large corporations with operations in multiple countries.
- Investment Clubs: groups of individuals who pool their resources to invest in various assets.
Definition of “Beneficial Owner” for Trusts
The definition of “beneficial owner” should apply to trusts differently than to other legal persons. This means considering all parties involved in a trust, including:
- Settlor: the person who creates the trust.
- Trustees: individuals or organizations responsible for managing the trust assets.
- Protectors: people or entities that have control over the trust assets.
- Beneficiaries: the people or organizations benefiting from the trust assets.
- Any other natural person exercising ultimate effective control: any individual who has significant influence over the trust.
By covering all types of legal entities and arrangements, Uganda’s beneficial ownership legislation can effectively address financial misconduct and economic crimes.