It was led by the Scotsman William Mackinnon and built upon his company's trading activities in the region, with the encouragement of the British government through the granting of an imperial charter, although it remained unclear what that actually meant.

It granted immunity of prosecution to British subjects and allowed them the right to raise taxes, impose custom duties, administer justice, make treaties and otherwise act as the government of the area.

Hoping to resolve this common interest in a peaceful manner, in 1886 Germany and Britain signed a treaty in which they agreed upon what lands they would exclusively pursue.

In an effort to ease this potential burden, Britain considered allowing a commercial company the right to administer and develop the eastern territory.

Other than the expected work involved with governing the exportation and management of goods and agriculture, the main role of the IBEAC was to begin facilitating the construction of a railway connecting the east coast region of Mombasa to Lake Victoria.

The four groups involved in Uganda, the Kabaka, French Catholics, Protestants, and the company, could not resolve their squabble amicably and with tensions continuing to rise, civil war broke out in January 1892.

With the aid of Frederick Lugard, the individual given the task of building the company a fortified location on Kampala Hill, the IBEAC earned itself a fruitless victory.