The Effectiveness of Uganda’s Company Law in Protecting the Rights of Minority Shareholders

Abstract

The study examined the extent to which minority shareholders are protected by the Companies Act. The objectives of the study were: to ascertain the rights enjoyed by minority shareholders, to find out how Uganda’s Company laws limit the rights of minority shareholders, and to propose measures to enhance the protection of the rights of minority shareholders. The researcher used qualitative research that involved a desktop review of primary and secondary data on the legal frameworks for minority shareholder protection. Primary sources will include the Constitution, legislation, and decided cases relevant to the study. Secondary sources of information used include textbooks, relevant newspaper articles, Journal Articles, and online sources. The legislators who enacted the Companies Act Cap 106, which establishes the division of the shares among the shareholders in the company, had in mind that shareholders would be unfairly treated in regard to their shares. Minority shareholders, who may be the majority of company members, can be the victims in companies. Therefore, it is incumbent upon the directors and the majority shareholders to abide by the Articles of Association and the Memorandum of Association, which govern the company. This and more are discussed in depth.