In a public notice issued on its website, the Uganda Registration Services Bureau (URSB) announced a major clean-up effort to deregister companies failing to file annual returns. This initiative, effective from August 30, 2024, is designed to streamline the URSB register and address the increasing number of companies neglecting their filing obligations.
Effective August 30, 2024, URSB will begin de-registering companies that have not filed annual returns for over five years. This measure is part of a broader strategy to maintain an accurate and up-to-date register. According to URSB, companies that fail to apply for restoration by this date will be deregistered, and their names will be made available for new applicants.
The Company Act under Section 134 mandates every company within forty-two (42) days after the annual general meeting to file the annual returns. This is done online on the URSB website. If a company fails to comply with this requirement, the company and every officer of the company who is in default shall be liable to a default fine as may be deemed fit by the registrar.
All companies registered with the Uganda Registration Services Bureau (URSB) are required to prepare and file Annual returns with URSB following the Companies Act, 2012. Annual Returns show the changes that have been made in the company during the previous year, such as shareholding, membership, directorship, and the company’s registered office, secretary, among others.
In the public notice, URSB requires all companies to comply with their legal obligation to file all outstanding annual returns. “Companies that fail to file annual returns for five (5) years or more are required to file a statement of solvency and show cause why they should not be struck off the register within sixty (60) days from the date of this notice.” URSB wrote in the notice
Companies that fail to file annual returns are subjected to a fine of Shs500,000, and if the default persists for five years, URSB has the authority to deregister such an entity.
Last year, URSB started its clean-up process by removing 110,822 companies from its register for failing to file annual returns for five years. This number has since increased to 186,000 companies. While some of these companies have complied with restoration requirements, many, particularly small and mid-sized enterprises, remain non-compliant.
Annual returns are crucial for validating a company’s legal status. They must include details about the company’s registered office, debentures, directors, and adherence to corporate governance principles. The Companies Act mandates that companies file these returns at least once every calendar year.
Denis Nabende, URSB’s Senior Public Relations and Corporate Affairs Officer, highlighted the need for a clean-up to identify active companies. He stressed that even dormant businesses must file returns within a 12-month grace period and notify the registrar when they resume activity.
URSB’s move to deregister companies that have neglected their filing obligations is aimed at improving the accuracy of its register and ensuring that only active, compliant businesses remain listed.
URSB says that many companies, the majority of which are small and mid-sized enterprises, have refused or neglected to file returns for more than five years. During last year’s clean-up by URSB, the affected companies were given a window through which they could be restored by fulfilling set requirements, which included payment of outstanding annual returns and a data update, among others.
