Enforcement Of Fines For Late Filing Of Annual Returns

Legal Alert, 30th September 2019, Issue 1

In this issue, we would like to inform you about the decision by the Uganda Registration Services Bureau to enforce the statutory fine on companies for late filing of annual returns.

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The Law:

Sections 132 and 133 of the Companies Act, 2012 make it mandatory for all companies to file annual returns at least once a year.

However, a company that does not file annual returns within forty-two days from the date of its Annual General Meeting incurs a fine of twenty-five currency points (UGX. 500,000) payable by the company and every officer of the defaulting company. (Section 134 (2) of the Companies Act, 2012). For instance: a defaulting company with four directors and one company secretary would be liable pay a fine of about UGX. 2,500,000 (Uganda Shillings Two Million Five Hundred Thousand) in addition to the ordinary registration fee.

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Alert:

Previously, the Uganda Registration Services Bureau has been lax in enforcing this fine. However, following the notable decline in filing annual returns, the Bureau has resolved to commence enforcement of the fine. The Bureau has already red-listed defaulting companies and has prohibited registration of all company documents for the said companies until the returns are filed. This further complicates matters for the companies because they will not be able to quickly transact as they would like to and also, suffer more fines for late filing of other documents like resolutions (the fine is UGX 100,000 for filing after 30 days of passing the resolution and is currently operational).

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Way forward:

Companies should conduct searches at the registry to ascertain the last date on which annual returns were filed and immediately file for the outstanding years albeit after paying the fine.

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