DHAMUZUNGU ISAAC DEANS 19/U/20321/PSA

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BUSINESS ASSOCIATIONS I
COURSE WORK

DHAMUZUNGU ISAAC DEANS

19/U/20321/PSA

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A beneficial owner is defined as a natural person who has final ownership or control

of a company or a partnership; or a natural person on whose behalf a transaction is

conducted in a company or a partnership and includes a natural person who exercises

ultimate control over a company or a partnership.

The Partnership Amendment Act Section 1 and Regulation 2 of the Partnership

(Beneficial Owners)Regulations, 2023 define a beneficial owner as a natural person

who has the final ownership or control of company or a natural person on whose

behalf a transaction is conducted in a company, including a natural person who

exercises ultimate control over a company.

Simply put, a beneficial owner is an individual who has final ownership or who

exercises ultimate control over a company.

In Uganda the concept of beneficial ownership is applicable to Partnerships as

enshrined in the Partnership (Beneficial Owners) Regulations of 2023 this is after the

amendment of Section 52 on which the whole regulation is premised as per Section

52A of the Partnership Amendment Act of 2022.

However this has no general application to all partnerships but it is strictly limited to

Limited Liability Partnerships (LLP’s) as per Section 47(2) of the 2010 Partnerships

Act which provides that, a limited liability partnership shall consist of not more than

twenty persons, and shall have one or more persons called general partners who shall

be “liable for all debts and obligations of the firm.”

This section recognizes a beneficial owner within a limited liability partnership on the

basis of one being liable for all obligations and debts for which it is common

knowledge that a limited liability partner is only partial liable for some debts on basis

of agreement or initial share capital or share percentage. This connotion means that a

general partner is a beneficial owner.

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The Companies Act, Partnership Act and Partnership (Beneficial Owners)Regulations

of 2023 of Uganda, require every company and a limited liability partnership

registered in Uganda to keep a register of its beneficial owners.

Beneficial owners in partnerships in Uganda are required to be registered by the

Uganda Registration of Services Bureau in accordance with Section 52 A of the

Partnership Amendment Act and Section 3 of the Partnership (Beneficial

Owners)Regulations of 2023 provide that a limited liability partnership with

beneficial owners shall keep a register of its beneficial owners and shall enter in the

register the following particulars the names and postal addresses of each beneficial

owner; the national identification numbers (NIN) of the beneficial owners; the date on

which each beneficial owner was entered in the register as a beneficial owner; the date

on which any person ceased to be a beneficial owner; a the tax identification number;

a summary of the nature of business activities the person is engaged in; the

immigration status, passport and visa details and work permit status, where

applicable, where the beneficial owner is foreigner and any other information as the

Minister may prescribe by regulations.

The register of beneficial owners is kept at the registered office of the limited liability

partnership except that if the work of making it up is done at another office of the

partnership, it may be kept at that other office; and if the partnership arranges with

some other person for the making up of a register on behalf of the partnership by that

other person, it may be kept at the office of that person at which the Partnerships

(Amendment) Act 2022 work is done but it shall not be kept at a place outside

Uganda as per Regulation 5(2) (a) and (b) of the Partnership (Beneficial

Owners)Regulations.
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Section 52A(5) The Minister may, by statutory instrument, make regulations

generally for giving effect to the provisions on beneficial owners including

prescribing penalties for breach of the regulations. (6) Where a partnership defaults in

complying with subsection (1), (2) or (3), every partner and every officer of the

partnership who is in default is liable to a daily default fine of five currency points.”

The beneficial owner register discloses the personal information of the beneficial

owners, the nature of ownership or control they have in the company or the

partnership, and the date they became or ceased to be beneficial owners, among

others.

Upon the creation of the beneficial owners’ register, the law requires that a notice of

the place where the register is kept together with a copy of the beneficial owners’

register be submitted to the URSB within 14 days, from the date of creation of the

register.

The format of the notices and information required to be filed are elaborated in the

Companies (Beneficial Owner) Regulations, 2023, and the Partnership (Beneficial

Owner) Regulations, 2023.

On 11 January 2023, the Uganda Registration Services Bureau (URSB) issued a

public notice that urged all companies and partnerships to submit beneficial owners’

information with the Uganda Registration Services Bureau not later than 30 days from

the date of the notice.

In the notice, URSB indicated that companies and limited liability partnerships will

not be allowed to make any other registrations unless they have provided beneficial

owners’ information.

Furthermore, the URSB specified that all applications for incorporation of companies

and limited liability partnerships will only be processed upon submission of the
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beneficial owners’ information. This means that; a company or a limited liability

partnership is required to: keep a register of the beneficial owners, notify the URSB of

the place where the register of the beneficial owners’ is kept, submit beneficial

owners’ information with the Registrar of Companies (URSB) by 11 February 2023.

A company or a limited liability partnership that fails to submit beneficial owners’

information with the URSB will not be allowed to make any other registrations unless

they have provided that information. All applications for incorporation of a company

and limited liability partnerships will only be processed upon submission of the

beneficial owners’ information.

Upon failure to comply with creating the register and filing a notice of the same with

the URSB, the entity, and every officer in default shall be liable to a daily default fine

of UGX 500,000 (approx. $135) each, for companies and UGX 1,000,000 (Approx.

$270) each, for partnerships.

The concept of beneficial ownership and its application to partnerships in Uganda has

not been fully embraced and this is evident in the legal framework for instance in the

Partnership (Beneficial Owners) Regulations of 2023 there is no provision for a

percentage threshold beyond which a beneficial owner is to be disclosed, or some

other precise definition which can be used to impose a limit to the disclosure

obligation.

In countries like the UK, USA and Kenya a beneficial owner is required to posses a

25% share holding capacity where as in Uganda this is not provided for.

In addition to the above point, the concept of beneficial ownership in partnerships has

been statutorily limited to limited liability partnerships as the rest have not been

provided for.
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In conclusion, the concept of beneficial ownership has been embraced in partnerships

in Uganda however, it is only limited to limited liability partnerships as there has been

a failure to have it apply generally to all partnerships in Uganda even when the

Partnership (Beneficial Owners)Regulations at the upfront paint an image of general

application.

References

Partnership Act 2010

Partnership Amendment Act 2022

Partnership (Beneficial Owners) Regulations 2023

Requirements for Beneficial Owners - URSB

Corporate Transparency -A guide to Beneficial Ownerships in Uganda by By Kaisa

de Bel (GFI), Onesmus Mugyenyi (ACODE), James Muhindo (ACODE)

Beneficial ownership requirements for companies in Uganda by Paul Mbuga, Marion

Angom and Catherine Lutalo Nakatudde

All Companies and Limited Liability Partnerships to Keep Beneficial Owners’

Registers; Regulatory Alert - Uganda by KPMG

“Partnerships and the Problem of Wrong Nomenclature: A Case for Reform of

Uganda’s Partnership Law” Okello Isaac Echipu (2023), Volume 52 Issue 2

Makerere Law Journal pp. 159-185