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Beneficial Ownership Transparency in Uganda: A New Era for Corporate Compliance

Introduction

Kampala, Uganda - In a significant move towards enhancing corporate governance and combating financial crimes, the Ugandan government has introduced a raft of amendments to the Companies Act 2012 through the Companies (Amendment) Act 2022. One of the most notable amendments is the requirement for companies to maintain a register of beneficial owners, which was implemented on January 9, 2023.

What Does This Mean for Ugandan Companies?

The new regulations require all private and public companies, including those registered as foreign companies or branches, to maintain a register of beneficial owners. The register must contain specific information about each beneficial owner, including:

• Name
• National identification number
• Occupation
• Address
• Mobile phone number
• Tax identification number
• Email address

Who Is Considered a Beneficial Owner?

A beneficial owner is defined as a natural person who has the final ownership or control of a company or exercises ultimate control over it. This includes individuals who conduct transactions on behalf of a company, such as those who exercise significant influence or control over its finances or financial policies.

Impact on Ugandan Companies

The requirement to maintain a register of beneficial owners is expected to have far-reaching implications for Ugandan companies. It will require them to identify and disclose their ultimate beneficial owners, which may lead to changes in the way they structure their ownership and control arrangements. This, in turn, may have significant consequences for companies that are listed on the Uganda Securities Exchange or those with foreign shareholders.

Penalties for Non-Compliance

Companies that fail to maintain a register of beneficial owners or notify the registrar of companies of any changes in their beneficial owners or the place where the register is kept will be subject to:

• Daily default fines
• Further penalties for making false statements or failing to keep accurate records

Conclusion

The introduction of the requirement for companies to maintain a register of beneficial owners marks an important step towards enhancing transparency and accountability in Uganda’s corporate sector. As the registrar of companies plays a critical role in enforcing this requirement, it is essential that all stakeholders work together to ensure compliance with these new regulations.