Regulatory and compliance requirements after registration:
Today, we discuss the basic regulatory and compliance requirements you need to put in place right after registration of your company/business.
Compliance is the lifeline of your business. Many businesses fail due to non-compliance with different laws and regulations. For example, many businesses close shop for failure to pay taxes or file tax returns in time. Failure to do so usually attracts penalties by the URA. The tax arrears and penalties keep accumulating and before you know it, URA enforcement will be shutting down your business and taking your property for failing to pay this debt.
Some of the things to consider after you’ve registered your company or business:
- Opening bank accounts:
You may need to open bank accounts for your company or business. Your intended bankers will require certified copies of some of the documents you filed when registering your company or business.
For companies, one important requirement will be a resolution by the company to open and operate bank accounts. The resolution must specify what banks you intend to open and operate the bank accounts with, and must specifically give the mandate to specified individuals to be signatories to those accounts. This resolution should be filed with the Registrar of Companies at the Uganda Registration Services Bureau (URSB) not later than 30 days after the meeting in which it was passed, and a copy later submitted to the bank.
You can consult your lawyer to prepare and file the resolution for you.
- Tax Identification Number (TIN):
Once you’re ready to start business, you must obtain a TIN from the Uganda Revenue Authority (URA). A TIN is the number your business will use to remit your taxes and file tax returns. One of the basic requirements for this is that at least 1 of the directors of your company or business must have individual TINs. Visit any branch of the URA or visit their website www.ura.go.ug for more information about how to obtain a TIN.
- Registration for Value Added Tax (VAT) is not mandatory for all businesses. VAT is mainly paid by businesses that deal in the supply of goods and services on which VAT is levied (taxable supplies). VAT registration is only mandatory for all businesses who have made or who foresee that they might make a sales turnover of UGX. 12.5 million in a quarter or UGX. 50 million a year. Otherwise, if your business deals in taxable supplies, you can apply to the Commissioner General at URA who has the discretion to allow you to voluntarily register for VAT even though you do not meet the above thresholds. Approach a tax consultant to advise you on the different taxable supplies.
- Trading licence:
This is issued to every person whose business involves the supply of certain specified goods and services within a municipality, city or town. They are usually issued at the headquarters of the district of operation of your business. A separate trade licence is issued for each location/branch of your business.
For businesses operating in Kampala, you can apply for a trading licence here: https://ecitie2.kcca.go.ug/portal/
Next week, we will discuss other regulatory and compliance requirements your business must adhere to during its lifetime.
Kokunda Patience- Associate Partner, Lawgic Advocates