How to register a Company Limited by Guarantee in Uganda

How to register a company Limited by guarantee in Uganda – A company limited by guarantee is a company owned by a group of members known as guarantors who all agree to pay a certain amount of money when the company gets into any problem. A company limited by guarantee does not have shareholders and must have at least one director and one guarantor. One person can assume both positions. At Afrisetup, we have help business owners to successfully start a business in Uganda and register a company limited by guarantee in Uganda hassle free. Feel free to get in touch with us for professional assistance.

 Why register a company Limited by guarantee in Uganda

1. Legal Protection for Members and Directors: One of the primary advantages of registering a company limited by guarantee is that it provides legal protection for the organization’s members and directors. This means that if the organization is sued or goes bankrupt, the members’ and directors’ personal assets are not at risk. Instead, each member’s liability is limited to the amount pledged to contribute to the company in the case of its dissolution.
2. Perpetual Succession: Another benefit of registering a company limited by guarantee is that it has perpetual succession. This signifies that the corporation survives the death or resignation of one or more of its members or directors. This makes attracting money and support from donors and other stakeholders simpler since they know the organization will continue to exist and carry out its objective even if leadership changes.
3. Ability to Apply for Grants and Funding: Registering a company limited by guarantee also allows non-profit organizations to apply for grants and funding from various sources, including government agencies, foundations, and corporations. Many funding sources require that non-profit organizations be registered as a company limited by guarantee in order to be eligible for funding. By registering as a company limited by guarantee, non-profit organizations can expand their funding opportunities and increase their chances of success.
4. Improved Credibility: Registering a company limited by guarantee can also help a non-profit organization’s credibility. The organization can demonstrate its legality and commitment to its objective by establishing a legal entity with a registered name and number. This can help to attract more funders, volunteers, and partners that are looking for organizations to support that are genuine and trustworthy.
5. Tax Benefits: Lastly, registering a company limited by guarantee in Uganda can provide tax advantages for non-profit organizations. Under the Income Tax Act, registered non-profit Companies are exempt from paying income tax on their income and donations received for charitable purposes. This can help to reduce the financial burden on the organization and allow it to allocate more resources towards its mission.

Step-by-Step Guide to Register a Company Limited by Guarantee in Uganda

Step 1: Choose a name: The first step in registering your company limited by guarantee is to choose a name. Your chosen name should be unique and not already registered by another company in Uganda. It should also not infringe on any trademarks or be offensive in any way. Step 2: Prepare the Memorandum and Articles of Association: The Memorandum and Articles of Association (M&AA) is a legal document that outlines the rules and regulations that govern your company limited by guarantee. This document should include information on the company’s objectives, membership requirements, the powers of the board of directors, and other important details. You can draft your M&AA yourself or hire a lawyer to help you with the process. Step 3: Appoint Directors and a Secretary: Your company limited by guarantee must have at least two directors and a secretary. The directors will be responsible for managing the organization and making important decisions. The secretary will be responsible for ensuring that the company complies with all legal and regulatory requirements. Step 4: Register your company with the Uganda Registration Services Bureau (URSB): To register your company limited by guarantee, you will need to submit the following documents to the URSB:

• The Memorandum and Articles of Association
• A statement of the company’s proposed activities
• Details of the directors and secretary
• A copy of the director’s and secretary’s identification documents
• A statement of compliance
• A registration Fee.

Step 5: Obtain a Tax Identification Number (TIN): Once your company limited by guarantee is registered, you will need to obtain a Tax Identification Number (TIN) from the Uganda Revenue Authority (URA). This will enable you to pay taxes and carry out other tax-related transactions. Contact us today for help on the above process

Requirements to register a Company Limited by Guarantee in Uganda | What are the requirements for company limited by guarantee? 

• Directors: The company must have at least two directors who are above the age of 18 years and are not disqualified from being directors under the Companies Act.
• Members: The company must have at least two members who are above the age of 18 years and are not disqualified from being members under the Companies Act.
• Memorandum and Articles of Association: The company must prepare and submit its Memorandum and Articles of Association, which should contain information about the company’s objectives, membership, and governance.
• Name Reservation: The company must reserve its proposed name with the URSB, and the name should not be similar to any existing company in Uganda.
• Registered Office: The company must have a registered office in Uganda where all official correspondence will be sent.
• Application for Registration: The company must submit an application for registration to the URSB, along with the required fees.
• Certificate of Incorporation: Upon satisfying all the requirements for registration, the URSB will issue a Certificate of Incorporation to the company.

Requirements to register a Company Limited by Guarantee in Uganda for Foreigners

• Certified copies of Memorandum of Articles of Association/Charter/ Constitution and Certificate from the country of origin duly witnessed.
• Registration forms:
• Form 24 – Particulars of Directors and Secretary
• Form 13 – Statement of all subsisting charges
• Form 25 – List of Names and Address of Persons Resident in Uganda authorized to accept service on behalf of the company.
• Form 26 – Address and Principal Office of Company.

What is the cost of registering a company limited by guarantee in Uganda? | How much is registering a company limited by guarantee in Uganda? | Fees for Company Limited by Guarantee in Uganda by Foreigners

There are several factors affecting the fee to register a company limited by Guarantee in Uganda such as location required to setup the company. It is advisable to contact us for more information concerning the cost.

Timeline for Company Limited by Guarantee Registration in Uganda | How long does it take to register a company limited by guarantee in Uganda?

To register a company limited by guarantee in Uganda it usually takes around 2-3 weeks from the date of submission of the application to the URSB, but the timeframe can vary depending on the workload at the URSB and any issues that may arise during the registration process.

 Post-Registration: What to Do Next after Registering a Company Limited by Guarantee in Uganda

Acquire a permit and certificate to show your registered from the NGO Bureau.

Mistakes to Avoid when you Register a Company Limited by Guarantee in Uganda

• Choosing a company name that is already in use
• Not providing supporting documentation for sensitive words
• Setting up the wrong type of company
• Inconsistencies and spelling mistakes
• Providing initials instead of full names
• Appointing an ineligible company director

Frequently Asked Questions (FAQs) about Registering a Company Limited by Guarantee in Uganda

1. What is a company limited by guarantee? A company limited by guarantee is a legal structure where the members of the company agree to pay a predetermined amount in the event that the company is liquidated. This structure is common among non-profit organizations.
2. What are the advantages of registering a company limited by guarantee in Uganda? Some of the benefits of registering a company limited by guarantee in Uganda include limited liability for members, perpetual succession, and separate legal personality for the company.
3. What taxes will my company limited by guarantee be subject to in Uganda?  If the company limited by guarantee in Uganda engages in any profit making business, it will be subject to corporate income tax at a rate of 30% of its taxable income. The company may also be subject to other taxes, such as value-added tax (VAT) and withholding tax, depending on its activities.
4. Can I convert my company limited by guarantee to a different business structure in Uganda? Yes, it is possible to convert a company limited by guarantee to a different business structure, such as a company limited by shares or a partnership. However, this process is subject to certain legal requirements and must be approved by the URSB.
5. What are the ongoing compliance requirements for a company limited by guarantee in Uganda? A company limited by guarantee in Uganda must file annual returns with the URSB and maintain proper accounting records.
6. What is the difference between limited by guarantee and company limited by shares in Uganda? The main distinction between a company limited by guarantee and a company limited by shares in Uganda is that the liability of shareholders is limited to the amount paid on shares, whereas the liability of guarantors (the members of a company limited by guarantee) is limited to the amount that they guarantee.

 Conclusion

Although to register a company limited by guarantee in Uganda may seem difficult, the procedure is actually rather simple. Following the above steps will help you properly get your company registered and in compliance with all legal and regulatory requirements. Remember to seek legal advice if you are unsure about any aspect of the registration process. Contact us today!