A Critical Assessment of Dissolution of Companies Under the Companies Act 2012

Table of Contents

DECLARATION ............................................................................................................................. i

APPROVAL ................................................................................................................................... ii

DEDICATION ............................................................................................................................... iii

ACKNOWLEDGEMENT ............................................................................................................. iv

LIST OF CASES ......................................................................................................................... viii

LIST OF STATUTES .................................................................................................................... ix

ABSTRACT .................................................................................................................................... X

CHAPTER ONE ............................................................................................................................. I

GENERAL INTRODUCTION ....................................................................................................... I

1.1 Background to the Study ........................................................................................................... I

1.2. Statement of the problem ......................................................................................................... 6

1.3. Research questions ..................................................................... _. ............................................ 7

1.4 Objectives of the study ........................................................................................................ 7

1.5 Scope of the Study .................................................................................................................... 8

1.6 Significance of the study ........................................................................................................... 8

1.7 Research Methodology ............................................................................................................. 9

1.8. Literature Review .................................................................................................................... 9

1.9. Organizational layout.. ........................................................................................................... 12

v

CHAPTER TWO .......................................................................................................................... l3

LEGAL FRAMEWORK FOR DISSOLUTION OF COMPANIES IN UGANDA .................... 13

2.0 Introduction ............................................................................................................................. 13

2.1 Companies Act 2012 ............................................................................................................... 13

2.1.1 Voluntary winding up .......................................................................................................... 13

2.2 Insolvency Act 2011 ............................................................................................................... 15

2.2.1 Voluntary liquidation ........................................................................................................... 15

2.2.2 Liquidation subject to supervision by court ......................................................................... 19

2.2.3 Liquidation by coutt ............................................................................................................. 20

2.3 N.S.S.F Act Cap 222 ............................................................................................................... 23

2.4 Income Tax Act Cap 340 ........................................................................................................ 23

2.4 Employment Act 2006 ............................................................................................................ 24

2.5 Common law principles ................ : ........................................................................................ :24

CHAPTER THREE ...................................................................................................................... 30

CIRCUMSTANCES UNDER WHICH A COMPANY MAY BE DISSOLVED UNDER

UGANDAN LAW ........................................................................................................................ 30

3.0 Introduction ............................................................................................................................. 30

3.3.1 Inability to pay debts ............................................................................................................ 34

CHAPTER FOUR ......................................................................................................................... 43

LEGAL CONSEQUENCES OF DISSOLUTION OF A COMPANY IN UGANDA ................. 43

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4.0 Introduction ............................................................................................................................. 43

4.1 Order of settlement of claims .................................................................................................. 43

4.2 Consequences of dissolution of a company ............................................................................ 49

4.2.1 Consequences to Shareholders ............................................................................................. 52

4.2.2 Consequences to Creditors ................................................................................................... 52

4.2.3 Consequences to the dissolved companies' staff .................................................................. 52

4.2.4 Consequences of proceedings against the company ............................................................ 53

4.2.5 Consequences as to documents ............................................................................................ 53

4.2.6 Consequences to customers ................................................................................................. 54

4.2.6 Consequences to the business and status of the Company .................................................. 56

CHAPTER FIVE .......................................................................................................................... 57

CONLUSION ............................................................................................................................... 57

5.1 Summary .................................................................................. : .............................................. 57

5.2 Findings .................................................................................................................................. 58

5.3 Recommendations ................................................................................................................... 59

References ..................................................................................................... 61