By Wanda S. Ronald
The Convid-19 pandemic has had a great impact on the world order and has introduced a new normal, most activities have come to a standstill and has affected several business operations due to the restriction measures issued by several countries. Some of the measures to date include a ban on large gatherings, restriction on movements in and out of the country, among others. However, despite the pandemic business operations have to continue and Organisations have to continue complying with the statutory mandates which include; holding of Annual General Meetings, statutory filings at Uganda Registration Services Bureau, payment of Taxes and collecting the same on behalf of Uganda Revenue Authority as Tax agents.
It is at that time of the year where most national and multinational organisations hold their Annual General Meeting (AGM) and ordinarily have been holding their AGM physically at several hotels in and around Kampala. However, these meetings are no longer possible due to the restrictions on mass gatherings yet most of the Companies did not anticipate a possibility of not being in position to meet as Shareholders to make the important decisions for their Companies and thus did not stipulate the same in their Articles of Association or provide other means of holding such important meetings for the Organisations.
However, several organisations have resorted to having virtual meetings during the total lock down era and have continued to do so despite the partial lifting of the lock down since it has proved to be effective and less costly in terms of logistics. However, since the Articles of Association which are the governing laws of an Organisation did not provide for Virtual meetings in holding of an AGM, several companies have resorted to Court in order to successfully hold the said AGM. One of Stanbic Bank Holdings Limited shareholders Oscar Kambona petitioned court under Section 142 of the Companies Act No.1 of 2012 seeking for orders among others to have a virtual AGM to have their AGM held virtually. Justice Musa Ssekaana agreed with the Applicant and issued such orders subject to the Bank obtaining prior no objection from the Uganda Securities Exchange and complying with all the applicable notices issued under the Uganda Securities Exchange Listings 2003 and the Law. The AGM was successfully held and several resolutions were passed but the most important one was a special resolution to Amend their Articles of Associations by inserting Articles 50 (a), 50 (b) and 50 (c) immediately after Article 50 to cater for virtual & hybrid AGM’s in the future. This means that as an Organisation they have embraced the new normal and are ready to ably conduct business and also give an opportunity to the shareholders who are not ordinarily domiciled in Uganda to always have an opportunity to attend the AGM in the future without necessarily appointing proxies for the same. By this lead several others have followed suit including British American Tobacco which held their virtual AGM on 23rd July 2020, the Lawyers umbrella body the Uganda Law Society which held their first virtual AGM on the 07th August 2020 and DFCU Holdings Limited which is expected to hold its Virtual meeting soon. Therefore, for all companies that are currently stuck on the way forward with regards to their AGM should resort to applying to Court under Article 142 of the Companies Act in order to obtain such orders and thereafter amend their Articles of Association to include the new normal way of conducting business across the globe.
Multinational for profit and not for profit organisations have also had to comply with the immigration laws of the country. This is majorly in line with immigration facilities of their expatriates which had expired during the Lockdown. In a bid for Internal Affairs to ensure that these expatriates stay in the country legally, it issued several notices which lasted till the 09th June 2020 when the resumed operations. Therefore, all Organisations are expected to expedite the renewal of these facilities in order not to accrue penalties for illegal stay. The Ministry of Internal Affairs equally set up several measures like the Standard operating procedures issued by the Ministry of Health like social distancing, among others.
Prior to the Covi-19 pandemic, organisations were expected to hand deliver their documents for Registration at Uganda Registration Services Bureau (URSB) but the same has been minimized due to the restrictions on gatherings and in the wake of decongesting most offices. Therefore, URSB has since moved to online filings of most of their documents and thus no need for clients gathering at their offices to submit or pick up documents. For Example, filing of Annual Returns have now fully shifted from submitting the bulky documents to inputting the information in the system, other company documents are being sent through an online platform and the registration is being done there.
Statutory obligations
Companies Rise or Fall on How Well They Renew Their LeadersWe all agree that with the Pandemic and very limited activities for most organisations, their incomes have been affected yet they still have to meet their statutory obligations like filing and making payments for PAYE, VAT, Excise duty, among others, filing and making payments for NSSF Deductions which is extremely hard. Uganda Revenue Authority (URA) and the National Social Security Fund (NSSF) created measures to ensure that Organizations continue complying with the filings and payments but with little hardships. For example, the Uganda Revenue Authority granted tax payers deferrals on making the payments but this did not amount to a waiver. Therefore, the organisations have to continue filing the returns and making payments as and when they are due at the time of the deferrals.
NSSF invited organisations to apply for Amnesty in order to have more time which in which to make payments for the contributions; this too did not mean that organisations have been cleared to not make payments but rather gave them more time within which they could make such payments and this has relieved most organisations who made use of use amnesty of the cumbersome payments at ago. However, with this amnesty we advise the corporations to continue filing their NSSF deductions on time and make the declared payments promptly in order to continue complying with their statutory obligations under the National Social Security Fund Act.
Furthermore, Uganda Revenue Authority has introduced the e-invoicing and e-receipting to enable it track the invoicing and receipt system to maximise on the revenue collections and mitigate tax administration shortfalls while promoting efficiencies. The purposes of the online invoicing and issue of receipts will also help to curb false refund claims, fictitious purchases with no physical movement of goods and unverifiable claims by taxpayers due to loss of records. We implore organisations to make use of this platform which will enable them to properly track their payments to the Authority. This measure has equally helped in decongesting their head office as one of the conditions set by Ministry of Health Standard operating procedures.
It is our advice that all organisations comply with the necessary statutory regulations. We, at Cymbell Advocates, are happy to help you in ensuring that you duly comply with the regulations.
Ronald Samuel Wanda is an advocate at Cymbell Advocates
