UGANDA GOVERNMENT NEEDS TO INTERVENE GIVEN THE ILLEGAL CHARGES IN REGISTRATION PROCESSES

Everybody involved in the registration of an undertaking which involves charging some money to render the service in Uganda is in big trouble.  You meet people who can better be called small kings.  They are at liberty to charge anything from a recommendation letter to merely endorsing of forms.  It is absurd and a big shame to the country.  Many of these people even if you pay them nothing at the end the month, the pay is a drop in the ocean to what they illegally solicit from those who call on them for services.  Can you believe that a chairman LC III can charge shs 100, 000 to give a recommendation letter?  It is no surprise as these people give all sorts of excuses.  They will tell you how they have to travel to the site and all other sorts of reasons for the money they charge.  Incidentally, it seems many of those who are operating without proper documentation (registration) have been failed by those in Government who have to endorse the forms.  

It is little wonder that this goes on.  Many people get peanuts as official pay and yet they need to afford basics of life which including fees for the children decent accommodation, owning a house just to mention a few.  

It is time the Government of Uganda worked on this matter.

William Kituuka Kiwanuka

HURDLES EXPECTED BEFORE BUSINESS REGISTRATION IN UGANDA 

Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Uganda. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.

This information was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 185 economies. The most recent round of data collection was completed in June 2012.

No.	Procedure	Time to Complete	Associated Costs
1	Reservation of a name at the Office of the Registrar To reserve a company name, the founder files a company name reservation request at the Uganda Registration Service Bureau. A clerk conducts an automated search and forwards the application to a staff lawyer. The Registrar reviews the application and, if the application is approved, returns it with the assessment, which the founder takes to the bank. Upon paying the fee (USH 10,000 for name search & USH 15,000 for name reservation), the founder receives a receipt that is used to complete the name reservation.	2 days	USH 25,000 + USH 2,000 bank fee
2	Pay fees at the bank  All nontax payments to government agencies must be made at a bank.	1 day	included in previous procedure
3	Obtain five necessary forms from the Uganda Bookshop The fees for the required incorporation forms are as follows:  • Statement of nominal capital: UGX 500 • Declaration of compliance with the requirements of the Companies Act: UGX 500 • Particulars of directors and secretaries: UGX 700 • Consent to act as director of company: UGX 500 • Notice of situation of the registered office and the registered post address: UGX 500	1 day	USH 5,600 (USH 500-700 for each form, 5 forms for incorporation, and 3 for tax registration)
4	Sign the declaration of compliance before a Commissioner for Oaths Form A2, Declaration of compliance with the requirements of the Companies Act, must be commissioned (signed and sealed) before a commissioner for oaths, who is an advocate. The other documents can be witnessed by any other reputable person because they are not an oath. The fees range from UGX 2,000 to UGX 10,000.	1 day	USH 2,000 -10,000
5	Obtain requisition for bank pay-in slip and bank payment advice forms from the Uganda Registration Services Bureau  Computerized processes reduced the time frame for paying government levies, such as fees for licenses and certificates. The process requires only 30 minutes, down from 4 working days.	1 day	no charge
6	Make payment of registration fees at a given bank Registration receipts are obtained from the bank where the fees were paid (within 30–40 minutes). Previously, the founder would pay the fee at the bank and then wait for 3 days to pick up the receipts from the Ministry of Justice.	1 day	no charge
7	File with the Registrar General Registration is administrative process through the creation of the Uganda Registration Services Bureau, which is autonomous from the Ministry of Justice and handles all business registration–related issues.  Fee schedule for company registration:  • Registration fees: UGX 100,000 • Stamp duty: 0.5 % of shared capital. • Stamp duty on Articles of Association: UGX 35,000 ( flat fee) Registration fees depend on the amount of share capital. They increase as the share capital increases. For instance, the fee for share capital UGX 5 million is UGX 160,000, and for share capital 10 million, UGX 186,000. Registration fees for a company whose share capital does not exceed UGX 40,000 has been increased to UGX 100,000.	1 day	see comments
8	File with the local office of the Uganda Revenue Authority a personal inquiry form for each director, and a corporate preliminary inquiry form; receive a uniform tax identification number (TIN) and apply for VAT Apply online from the website for TIN and VAT. TIN approval takes a period of 2-28 days. The Corporate Tax file number is internally assigned.	5 days	no charge
9	An inspector from URA inspects the business premises	1 day	no charge
10	Obtain application forms for trading license  For ease of distribution of trading licenses, a decentralized system has been set up in which the 5 companies were appointed to collect dues on behalf of Kampala City Council (KCC) for each of the city’s five administrative divisions. Currently, the services of these companies have been suspended as the city council is conducting assessment to decide on the adequate license fees before contracting the companies again.	1 day	no charge
11	The licensing officer arranges an inspection of the premises and fills out an assessment form.                              The trading license is a general business license required for all companies, including service companies. The issuing authority is the municipal authority in the jurisdiction where the business premises are situated. A trading license can be obtained almost instantly, if the necessary documents on the nature of the intended business activities are available and the amount is assessed by the municipality or city council. Standard forms must be completed and submitted with the memorandum and articles of association and the certificate of incorporation.	1 day	no charge
12	Pay the license fee at the bank. The founder must pay the relevant license fee at the bank, as follows:  • Opening office: UGX 156,500 • Carrying out retail business: UGX 206,500 • Carrying out wholesale business: UGX 366,500	1 day	see the following procedure
13	Obtain the trading license  If it is deemed necessary, the municipal inspectors (health and building) reserve the right to revoke and cancel the trading license.	10 days	USH 400,000
14	File a form with the National Social Security Fund (NSSF). The National Social Security Fund (NSSF) is governed by the revised laws of Uganda, the National Social Security Fund Act Cap 222. The NSSF is a compulsory saving scheme that covers all employees in the private sector, including nongovernmental organizations and parastatal bodies that are not covered by the government pension scheme. Under the Act, every employer must register the company with the NSSF when it has 5 or more employees and all employees ages 16–35 as NSSF members. This procedure takes 1–7 days. Registration forms for NSSF can now be downloaded from the NSSF website.	4 days	no charge
15	Make a company seal A company seal is mandatory.