Kampala. The Uganda Registration Services Bureau (URSB) has deregistered 37,702 companies for failing to comply with statutory filing requirements, following years of warnings and efforts to encourage compliance.
A list of the affected companies has been published on the URSB website, effectively removing them from the country’s register of legally recognized business entities.
According to URSB Principal Communications Officer, Denis Nabende, the bureau undertook the exercise after numerous companies failed to respond to notices requiring them to regularize their status.
“We actually put out a notice in July and August 2023 requiring companies that had not filed their returns and had been struck off to come back to URSB and indicate that they were going to regularize and then be brought back onto the register,” Mr Nabende said.
“But between July 2023 and now, many did not come back,” he added.
Mr Nabende explained that filing annual returns is a legal requirement for registered companies and serves as confirmation that a business remains operational and that details relating to its directors and shareholders remain current.
“Those returns indicate that the company is still alive. Nothing has changed in terms of shareholders and the directors are still the same,” he said.
He noted that some individuals register companies to pursue specific business opportunities but later abandon them after achieving their objectives or when projects fail to materialize.
According to URSB, the affected companies had remained non-compliant for at least five years despite repeated reminders and opportunities to rectify their status.
However, the mass deregistration has raised concerns among business leaders and economists who warn that the move could have implications for entrepreneurship and the country’s tax base.
The Chairperson of the Federation of Small and Medium Enterprises Association, John Walugembe, argued that many of the affected companies could potentially have been rehabilitated into compliant businesses.
“Instead of deregistering, URSB should have done more to look for those companies and hand-hold them because it is easier to turn these non-compliant companies into compliant companies than to get someone to register afresh,” Mr Walugembe said.
He also called on the bureau to review its digital compliance systems to ensure they are accessible to entrepreneurs operating in areas with limited internet connectivity and unreliable electricity supply.
“At the level of efficiency, I would say URSB has improved. But what we are saying is that improved efficiency should not be at the expense of entrepreneurs. Look at that entrepreneur in Zombo where electricity is not there for three months. How is he going to upload a resolution, internet and all? We must create a system that caters for all,” he said.
The development comes at a time when Uganda continues to register thousands of new businesses annually, reflecting a vibrant entrepreneurial culture. However, many enterprises struggle to survive beyond their early years due to financial constraints, regulatory challenges and operational difficulties.
Analysts say the deregistration exercise underscores the challenge of balancing enforcement of corporate compliance requirements with the need to support businesses to remain active contributors to economic growth and job creation.
While URSB maintains that the action was necessary to maintain an accurate and credible companies register, stakeholders are urging regulators to adopt measures that encourage compliance without placing undue burdens on small businesses.