Sole Proprietorship Registration In Uganda
A sole proprietorship, also known as a sole tradership, individual entrepreneurship or proprietorship, is a type of enterprise owned and run by one person and in which there is no legal distinction between the owner and the business entity. A sole trader does not necessarily work alone and may employ other people.
A sole proprietor is someone who owns an unincorporated business by himself or herself. However, if you are the sole member of a domestic limited liability company (LLC), you are not a sole proprietor if you elect to treat the LLC as a corporation. To become a legal sole-proprietor in Uganda, you need to register with the Uganda Revenue Authority (URA) to obtain a formal trade name and Tax Identification Number, which are used for recognizing a legal entity.
Process For Sole Proprietorship Registration In Uganda
A sole proprietorship is a business owned and managed by a single individual. The business owner takes all the profits and losses.
The following are steps to follow in registering sole proprietorship business in Uganda
Conduct a name search. This process takes between two days to two weeks. You are required to fill a form at Uganda Registration Services Bureau (URSB).Charges for this service is Ush 2,000.
Once the Uganda Registration Services Bureau (URSB) confirms that your name is unique and non-existence in their system, they reserve it until you fully register your business. Name reservation is done once an individual fills a form and submits it to the Uganda Registration Services Bureau. The fully filled form is returned to the same institution together with a fee which should not exceed Ush 23,000.The amount should be paid at the bank.
The form obtained from the URSB should have the following details:
Business name
Nature of the business
Name, surname, nationality and place of residence
Name reservation takes 30 days. If the period elapses, an individual must do reservation again; this must include the name reservation fees.
Log in to Uganda Revenue Authority website and obtain form which will enable you fill the details, submit and wait for your URA pin. This pin is very important, especially when applying for a tender.
Once you have submitter the required details to the Uganda Registration Services Bureau (URSB), wait for one month to confirm whether you are fully registered.
Registering As A Sole Proprietor In Uganda
To become a legal sole-proprietor in Uganda, you need to register with the Uganda Revenue Authority (URA) to obtain a formal trade name and Tax Identification Number, which are used for recognizing a legal entity.
To register as a sole proprietor with the URA, you will need the following documents:
Copy of two identification documents e.g., driver’s permit, voter’s card, passport, employer ID, national ID, etc.
A completed individual application form
Documents Required For Sole Proprietors In Uganda
Rubber Stamp of the Sole Proprietorship.
Copy of Business Registration.
Duly completed Mandate Form.
Signature Card signed by the Proprietor.
NIC of the Proprietor.
Taxation System For Sole Proprietors In Uganda
If monthly chargeable income does not exceed RHX 235,000 (EUR 56), no income tax is charged.
If monthly chargeable income exceeds RHX 235,000, the income tax is charged on the following schedule:
For monthly income RHX 235,000 – RHX 335,000: 10% on the amount that exceeds the lower boundary
For monthly income RHX 335,000 – RHX 410,000 : RHX 10,000 monthly plus 20% on the amount that exceeds 335,000.
For monthly income over RHX 410,000: RHX 25,000 and 30% of the amount that exceeds RHX 410,000 a month.
Steps For Establishing A Sole Proprietorship In Uganda
Assess your risks.
Get an Employer Identification Number (EIN)
Name your adventure.
Pay estimated taxes.
Register for taxes.
Obtain licenses and permits.
Legal Requirements For Establishing A Sole Proprietorship In Uganda
Because the business uses your individual tax code, you don’t need to register as a business. But depending on your field you may need a license such as a food and liquor license, or an admission to practice law. Sole proprietorship taxes are easy, because all income the business earns is treated as personal income.
Characteristics Of Sole Proprietorship In Uganda
Single Ownership.
No Sharing of Profit and Loss.
One man’s capital.
One-man Control.
Unlimited Liability.
Less Legal Formalities.
Challenges Of Sole Proprietorship In Uganda
Unlimited liability.
Difficulty in raising capital.
Selling the business is a challenge.
Less financial control.
Limited management skills.
Risk in decision-making.
No economies of scale.
Office Location Of Sole Proprietorship In Uganda
Uganda Registration Services Bureau
Uganda Business Facilitation Centre Plot 1 Baskerville Avenue, Kololo
Toll Free: 0800 100 006
Call Center: +256 417 338 100
Phone: +256 414 233 219 / 0417338000
Whistle Blower Hotline: 0414673200
WhatsApp: 0712 448 448
Fax: +256 414 250 712
ursb@ursb.go.ug (General Correspondences)
helpdesk@ursb.go.ug (For Enquiries)