Exam (elaborations)
COMPANY LAW NOTES
- Module
- Company Law
Exam of 80 pages for the course Company Law at BPP (COMPANY LAW NOTES)
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STUDYCLOCK EXAM REVIEWwww.ugandaonlinelawlibrary.com law teacher notes/LDC
COMPANY LAW
Table of contents
Company law in Uganda is an amalgam of the English Common Law, doctrines of
Equity and the Company’s Act.
The purpose of company law is to regulate the formation, activity, official and
winding up of an incorporated body created under the Companies Act, Cap 110 Laws
of Uganda.
Definition
A company or a corporation is a legal entity formed by member referred to as
shareholders and registered in accordance with the companies Act of Uganda- Cap
110.
It is a separate legal entity distinct and different from the founders/ shareholders.
TERMS IN COMPANY LAW
Administration
This is a special procedure for managing the affairs of an insolvent company for a
limited period to determine whether the company’s business can be salvaged or
wound up more efficiently.
Allotment
The issue of a share by a company to the first holder(s) of share(s).
Annual general meeting (AGM)
A meeting of the members of a company which must be held every year.
Annual return
Is a form which a company is obliged to complete and file with the registrar of
companies every year disclosing various details about the company, its members and
its officers.
Articles of Association
A document which, together with the Memorandum of Association, comprises the
constitution of a company. The Articles contain detailed rules for the administration
of the company affairs and are often modeled on the modal in Table A of the
Companies Act.
Auditor
Is a suitably qualified person or firm whom a company is obliged to appoint to audit
its statutory accounts and report to the members on these every year.
Authorized share capital
Is the aggregate of the company’s issued share capital and of any remaining shares
which are unissued.
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Board of Directors
The body which has the prime responsibility for the management of a company,
being the directors of the company acting collectively in accordance with its articles.
Call
The procedure whereby a shareholder is require to pay to the company the whole or
part of any unpaid amount outstanding in respect of a share which has already been
issued.
Capital
In the context of a company, it is used to refer to the company’s issued share capital
or it can be used to refer to the finance which a company has raised being the
aggregate of its equity capital and its loan capital.
Capitalisation
An accounting exercise whereby net profits which have been retained in a company
and not paid out to shareholders can be used to increase the size of the company’s
paid up share capital or its other undistributable reserves, usually by making a bonus
issue of shares with a suitable aggregate normal value to its exiting shareholders.
Certificate of Incorporation
The document issued by the Registrar of companies when a company is incorporated
and which constitutes proof that the company has been duly incorporated.
Certificate of Incorporation on change of name
An amended certificate of incorporation which is issued by the Registrar of
companies when a company has changed its name, the new name taking effect upon
the issue of this certificate.
A Charge:
A form of security which a company may give over its assets to a creditor and which
may be either a fixed charge or floating charge.
Class rights:
Special rights conferred by a company’s articles on the holders of certain shares
which usually have a special designation. Such rights may include priority to a
dividend, enhanced. Voting strength or a power of veto and can only be cancelled or
varied in accordance with a special procedure. The courts have also applied this
term to include any special rights which the articles confer on a shareholder which
are inextricably linked with the shareholder’s holding of shares but are not attached
to any shares in particulars.
Company limited by guarantee:
A type of registered company where the members have guaranteed to pay a
specified contribution towards its debts and liabilities. The liability of its members is
limited to the amount of this guarantee.
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Company limited by shares:
A type of registered company whose members are issued with shares in the
company in return for payment. The liability of its members is limited to paying to
the company any unpaid shares.
Company secretary:
An officer which every company must appoint who has various duties concerning the
administration of the company and the filing of information with the registrar of
companies.
Consolidation:
A method of accounting whereby certain groups of companies produce group
accounts showing the financial affairs of the whole group rather than each group
member simply producing separate statutory accounts.
Constructive Notice:
A doctrine, also known as “deemed notice,” whereby someone dealing with a
company is treated as knowing everything about the company that could be
discovered from an examination of its file at the registry of companies.
Corporation Personality:
The fact that the company is treated by the law as a separate person from its
members and as having its own rights and liabilities.
Corporate veil:
A term commonly used to describe the separation of the company’s rights and
liabilities from those of its members and in particular the fact that the members of a
company will usually have no liability for the company’s debts and liabilities.
Crystalisation:
The transformation of a floating charge so that it settles upon the assets covered by
the charge whereupon it takes on the characteristic of a fixed charge and the
company is no longer free to deal with the asset charged. Crystallisation will occur in
accordance with the terms of the instrument creating the charge and will usually
require the serving of a notice of crystallization by the creditor unless it is an
automatic crystallisation.
Deffered share:
A share in a company which has inferior rights.
Derivative action:
An action which a minority shareholder may in certain circumstances be permitted to
bring on behalf of the company in the interest of justice even though the action has
not been authorized by the board or by a general meeting of the company.
Director:
An officer of the company being a member of the board of directors or a sole
director.
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