What is a Company Limited by Guarantee?
A company limited by guarantee is a legal structure where members, known as guarantors, agree to contribute a set amount if the company faces financial trouble. This structure is ideal for non-profits as it doesn’t have shareholders and offers legal protection for its members and directors.
Benefits of Registering a Company Limited by Guarantee in Uganda
- Legal Protection: Members' and directors' personal assets are protected; liability is limited to the amount they agree to pay.
- Perpetual Succession: The company continues to exist even if members or directors change, offering stability.
- Access to Grants and Funding: This structure allows non-profits to apply for grants from various sources.
- Increased Credibility: Registering your organization builds trust with funders and stakeholders.
- Tax Benefits: Registered non-profits are exempt from income tax on donations and charitable activities under Uganda’s tax laws.
Steps to Register a Company Limited by Guarantee in Uganda
- Choose a Name: Select a unique company name that is not already in use.
- Prepare the Memorandum and Articles of Association (M&AA): Outline the company's rules, objectives, and membership guidelines.
- Appoint Directors and a Secretary: Your company needs at least two directors and a secretary.
- Register with the Uganda Registration Services Bureau (URSB): Submit the required documents, including the M&AA, director details, and a registration fee.
- Obtain a Tax Identification Number (TIN): Once registered, get a TIN from the Uganda Revenue Authority for tax-related activities.
Common Mistakes to Avoid
- Choosing a name already in use.
- Failing to provide full documentation.
- Appointing ineligible directors.
- Making spelling errors in legal documents.
Requirements for Foreigners
Foreign entities must submit certified copies of their country of origin’s Memorandum of Articles, registration forms, and appoint a local representative.
