Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
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.
| No. | Procedure | Time to Complete | Associated Costs |
|---|---|---|---|
| 1 | Reservation of a name at the Office of the Registrar | 2 days | USH 25,000 + USH 2,000 bank fee |
| 2 | Pay fees at the bank | 1 day | included in previous procedure |
| 3 | Obtain five necessary forms from the Uganda Bookshop | 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 | 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 | 1 day | no charge |
| 6 | Make payment of registration fees at a given bank | 1 day | no charge |
| 7 | File with the Registrar General | 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 | 5 days | no charge |
| 9 | An inspector from URA inspects the business premises | 1 day | no charge |
| 10 | Obtain application forms for trading license | 1 day | no charge |
| 11 | The licensing officer arranges an inspection of the premises and fills out an assessment form. | 1 day | no charge |
| 12 | Pay the license fee at the bank. | 1 day | see the following procedure |
| 13 | Obtain the trading license | 10 days | USH 400,000 |
| 14 | File a form with the National Social Security Fund (NSSF). | 4 days | no charge |
| 15 | Make a company seal | 2 days | USH 225,000 |