“Law is Law:” URSB Chief Defends New Beneficial Ownership Regulations

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The Registrar General of the Uganda Registration Services Bureau (URSB) Mercy Kainobwisho has defended the necessity of the new Beneficial Ownership Regulations – a set of rules emanating from the Amendment of the Companies and Partnership Acts, requiring companies and partnerships to file with her office details of their “beneficial owners.”

Any corporation that fails to heed these regulations is condemned to a daily fine of 500,000/= Uganda Shillings.

Following President Yoweri Museveni’s assent to the Companies (Amendment) Act of 2022 and the Partnership (Amendment) Act of 2022, the Minister of Justice and Constitutional Affairs, Nobert Mao on January 5th 2023 issued the Companies (Beneficial Ownership) Regulations of 2023 and the Partnership (Beneficial Ownership) Regulations of 2023.

These laws majorly aim to operationalise Recommendation 24 of the Financial Action Taskforce (FATF) that calls upon countries to put in place strong measures to combat money laundering, tax evasion, terrorism financing and other frauds.

According to the Financial Action Taskforce, “legal persons” ie corporations, have been significantly used by criminals across the globe to commit their crimes and therefore it is necessary for countries to have information about the “ultimate” owners of these corporate vehicles.

In fact, Uganda is on the taskforce’s grey list – a catalogue of countries with gaps in their legal and regulatory frameworks for combatting financial crimes but are working with the organisation toward addressing these challenges.

Over the weekend as the deadline for current companies and partnerships to submit Beneficial owners’ information reached , there was a social media storm as some lawyers critiqued the regulations as harsh, rushed and a violation of the human rights to privacy.

” Today, while trying to interpret the information required by [URSB] for beneficial ownership, it occurred to me that something could be wrong.”

Said Ferdinard Tumuhaise, an Associate at Kampala Associated Advocates on Twitter on Saturday.

” I wouldn’t be shocked if a case is filed in our courts challenging the same. The rushed nature by which the Bills were passed without scrutiny poses challenges for data protection. How safe is the data given to URSB that it won’t be accessible by the public[?]…With this information, it means you can easily find out who owns Coca Cola, Yamaha, Toyota, Mercedes if such companies have subsidiaries in Uganda.”

He added.

Traditionally, the identity of a corporation is separated from that of its owners under a fictitious curtain based on a legal principle enunciated in an 1847 court case of Salomon Versus Salomon.

Therefore, URSB regulation seems to be a desperate attempt by a regulator to tighten the nooze on the new frontiers of crime facilitated by corporate vehicles.

In a twitter thread, URSB Registrar General Mercy Kainobwisho belabors to explain the necessity of the regulations.


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She calls upon all Ugandans to embrace the rules in order to avert a situation where Uganda is like a pariah in the global financial system.

” Globally, Corporate vehicles like companies, partnerships, trusts, etc have been misused for money laundering, terrorism financing among other illegal activites. As such all countries have to ensure transparency in the ownership of corporate vehicles to mitigate the global risks.”

Ms. Kainobwisho said.

” The Anti-Money Laundering Act (AMLA) and the Anti-Money Laundering Regulations, 2015, designate the Registrar of Companies as an accountable person charged with the responsibility of identifying, obtaining and keeping a record of beneficial owners of the different legal persons.

” All these efforts are to move Uganda from the FATF grey list countries. A grey list means that a country is under increased monitoring & has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes. Otherwise it will go on the black list.

” A country on the FATF black list is that one that has serious strategic deficiencies to counter money laundering, terrorist financing, and financing of proliferation. Such countries are high-risk for any transactions & [are] placed under economic sanctions/penalties etc. ”

The Registrar General added.

” As Ugandans and people concerned about the implications for failure to comply, we need to weigh the costs & benefits of non-compliance with global requirements. The price we shall pay for non-Compliance. Our prayer is that you comply and rally behind this move.”

She concluded.

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The FATF recommendations grant countries flexibility in that they can implement its guidelines in ways they deem fit based on how well they appreciated their individual problems.

Uganda, on her part, has imposed a daily fine of 500,000/= Uganda Shillings (25 currency points/ 1 currency point is equal 20,000/= UGX) Per Day on any corporation that fails or refuses to comply with the regulations, according to Regulation 3(4) of the Companies (Beneficial Ownership) Regulations.

Interestingly, Registrar General Mercy Kainobwisho has denied the imposition of this fine in her efforts to dumb down the controversy saying she would not register any more documentation of companies that fail to heed the regulations.

“The current penalty applicable to companies or partnerships that do not submit this Beneficial Ownership (BO) info is the registrar of Companies’s refusal to accept any other subsequent filings on the company file until they comply. The URSB notice was clear.” She said, referencing a public statement from the institution.

Public statements do not have the force of law unlike statutory instruments and when pressed on this by another lawyer, the Registrar General was adamant.

” Madam RG, we read the notice. The questions arise from the law where you derive this exact notice. The Regulations have 10 clauses, none provides for what you state here. I think you will agree with us that this legislation lacks a lot of provisions. It is well intended but rushed.” Said Tonny Tumukunde, Managing Partner of Law Firm, Tumukunde & Co Advocates.

” I think the most urgent issue now is to submit the [registration] forms. The rest is noise and too much english. Law is Law. Kindly encourage your clients to submit the forms. The fact that you once worked with URSB, you should be in position to champion the cause…” Ms. Mercy Kainobwisho responded to the lawyer who once worked with URSB – before blocking him!


Benjamin Ahikiiriza is a Legal Writer And Digital Communications & Marketing Specialist majoring in Lawyers, Law Firms And the larger Legal Sector.

Benjamin currently Works as the Director of Content and Business Development At LegalReports.


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