Companies Act, 2002

Chapter 212

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Chapter 212

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Companies Act, 2002

Chapter 212

Published in Government Gazette
Assented to on 27 June 2002
Commenced on 1 March 2006 by Companies Act (Date of Commencement) Notice, 2006
[This is the version of this document as it was from 1 July 2016 to 29 June 2019.]

[Amended by Business Laws (Miscellaneous Amendments) Act, 2012 (Act 3 of 2012) on 27 July 2012]
[Amended by Finance Act, 2016 (Act 2 of 2016) on 1 July 2016]

An Act to repeal and replace a law relating to companies and other associations, to provide for more comprehensive provisions for regulation and control of companies, associations and related matters.

Part I – Preliminary provisions (ss. 1-2)

1. Short title and commencement

(1)This Act may be cited as the Companies Act.

(2)This Act shall come into operation on such date as the Minister may by notice in the Gazette appoint and the Minister may appoint different dates for the coming into operation of the different provisions or Parts of this Act.

2. Interpretation

In this Act, unless the context otherwise requires—"articles" means the articles of association of a company, as originally framed or as altered by special resolution, including so far as they apply to the company, the regulations contained in Table A in the First Schedule to either of the repealed enactments or in Table A in the Schedule to this Act;"bank" means a bank as defined in the Banking and Financial Institutions Act¹;¹Cap. 342"book and paper" and "book or paper" include accounts, deeds, writings and documents;"Capital Markets and Securities Authority" means the Authority established by section 6 of the Capital Markets and Securities Act²;²Cap. 79"certified" means certified in the prescribed manner to be a true copy or a correct translation;"certified public accountant" means Certified Public Accountant as defined in the National Accountants and Auditors Act³;³Act No. 33 of 1972"company" means a company formed and registered under this Act or an existing company;"the court", used in relation to a company, means the court having jurisdiction to wind up the company;"dealer or investment adviser" means a dealer or investment adviser as defined in the Capital Markets and Securities Act⁴;⁴Cap. 79"debenture" includes debenture stock, bonds and any other securities of a company whether constituting a charge on the assets of the company or not;"director" includes any person occupying the position of director by whatever name called;"document" includes summons, notice, order, and other legal process, and registers;"existing company" means a company formed and registered under either of the repealed Ordinances;"generally accepted principles of accounting" means such practices, principles, guidelines or accounting and auditing standards, taking into account international practices, principles and standards, as shall be issued by the National Board of Accountants and Auditors;"group" means a parent or holding company and its subsidiaries;"insolvency practitioner" means—(i)a Certified Public Accountant certified by the National Board of Accountants and Auditors or other regulatory body of the profession as having the requisite experience of insolvency;(ii)a qualified Advocate of the High Court having the requisite experience of insolvency;(iii)such other persons as may be specified by the Minister in regulations;"insurance company" means a company which is an insurance broker, insurance agent or an insurer as those expressions are defined in the Insurance Act⁵;⁵Cap. 394"limited company" means a company limited by shares or a company limited by guarantee;"memorandum" means the memorandum of association of a company, as originally framed or as altered from time to time;"Minister" means the Minister for the time being responsible for trade;"offer document" means any document, prospectus, notice, circular, advertisement, or other invitation, offering to the public for subscription or purchase any shares or debentures of a company or any interest therein, or any right to acquire any shares or debentures or any interest therein;"officer", in relation to a body corporate, includes a director, manager or secretary;"open-ended investment company" means a body corporate—(a)which has as its purpose the investment of its funds with the aim of spreading investment risk and giving its members the benefit of the results of the management of those funds by or on behalf of that body; and(b)the members in which have rights represented by shares of securities of that body which—(i)those members are entitled to have redeemed or purchased from them by or out of funds provided by that body; or(ii)the body shares can be sold by the members on an investment exchange at a price related to the value of the property to which they relate;"personal representative" means—(a)in the case of a deceased person to whom the Indian Succession Act, 1865 applies either wholly or in part, his executor or administrator;(b)in the case of any other deceased person, any person who, under law or custom, is responsible for administering the estate of such deceased person;"printed" means reproduced by original letterpress or by laser or other form of printer or by such other means as may be prescribed;"Registrar" means the Registrar of companies or any Deputy or Assistant Registrar or other officer performing under this Act the duty of registration of companies;"the repealed Companies Act" means the Companies Act⁶ (Ordinance No. 46 of 1931, of the Laws of Tanganyika);⁶R.L. Cap. 212"the repealed Ordinances" means the Indian Companies Act, 1882 (as applied to Tanzania);"share" means share in the share capital of a company, and includes stock except where a distinction between stock and shares is expressed or implied;"statutory corporation" has the meaning given in the Public Corporations Act⁷;⁷Cap. 257"Table A" means Table A in the Schedule to this Act;"Tanzania" means mainland Tanzania and does not include Tanzania Zanzibar;"undertaking" means a body corporate or partnership or an unincorporated association carrying on a trade or business with or without a view to profit;"wholly-owned subsidiary": a body corporate shall be deemed to be the wholly-owned subsidiary of another if it has no members except that other and that other's wholly-owned subsidiaries or its nominees.

Part II – Incorporation of companies and matters incidental thereto (ss. 3-44)

Chapter I
The company's memorandum and articles (ss. 3-29)

Memorandum of Association (ss. 3-8)

3. Mode of forming incorporated company

(1)Any two or more persons, associated for any lawful purpose may, by subscribing their names to a memorandum of association and otherwise complying with the requirements of this Act in respect of registration, form an incorporated company, with or without limited liability save for a limited liability single shareholder company formed by an individual.[subsection (1) amended by section 18 of Act 3 of 2012]

(2)Such a company may be either—

(a)a company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them (in this Act termed "a company limited by shares"); or

(b)a company having the liability of its members limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its being wound up (in this Act termed "a company limited by guarantee"); or

(c)a company not having any limit on the liability of its members (in this Act termed "an unlimited company").

(3)A "public company" is a company limited by shares or limited by guarantee and having a share capital, being a company the memorandum of which states that it is to be a public company, and a "private company" is a company as defined in section 27.

4. Requirements with respect to memorandum

(1)The memorandum of every company shall be printed in the English or Kiswahili language and shall state—

(a)the name of the company, with "public limited company" as the last words of the name in the case of a public company, or with "limited" as the last word of the name in the case of a company limited by shares or by guarantee (not being a public company); and

(b)the objects of the company.

[subsection (1) amended by section 19 of Act 3 of 2012]

(2)The memorandum of a company limited by shares or by guarantee must also state that the liability of its members is limited.

(3)The memorandum of a company limited by guarantee must also state that each member undertakes to contribute to the assets of the company in the event of its being wound up while he is a member, or within one year after he ceases to be a member, for payment of the debts and liabilities of the company contracted before he ceases to be a member, and of the costs, charges and expenses of winding up, and for adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding a specified amount.

(4)In the case of a company having a share capital—

(a)the memorandum must also, unless the company is an unlimited company, state the amount of share capital with which the company proposes to be registered and the division thereof into shares of a fixed amount;

(b)no subscriber of the memorandum may take less than one share;

(c)there must be shown in the memorandum against the name of each subscriber the number of shares he takes.

5. Signature of memorandum

(1)The memorandum shall be dated and shall be signed by each subscriber in the presence of at least one attesting witness.

(2)Opposite the signature of every subscriber and attesting witness there shall be written in legible characters his full names, his occupation and postal address.

6. Restriction on alteration of memorandum

A company may not alter the conditions contained in its memorandum except in the cases, in the mode and to the extent for which express provision is made in this Act.

7. Statement of company's objects: general commercial company

Where the company's memorandum states that the object of the company is to carry on business as a general commercial company—

(a)the object of the company is to carry on any trade or business whatsoever; and

(b)the company has power to do all such things as are incidental or conducive to the carrying on of any trade or business by it.

8. Mode in which and extent to which memorandum may be altered

(1)A company may, by special resolution—

(a)alter the provisions of its memorandum with respect to the objects of the company;

(b)in the case of a private company seeking to become a public company, or a public company seeking to become a private company, alter the company's memorandum including by way of the inclusion or, as applicable, the deletion of a statement that the company is to be a public company:

Provided that if an application is made to the court in accordance with this section for the respective alteration to the memorandum to be cancelled, it shall not have effect except in so far as it is confirmed by the court.

(2)An application under this section may be made—

(a)by the holders of not less in the aggregate than ten percent in nominal value of the company's issued share capital or any class thereof or, if the company is not limited by shares, not less than ten percent of the company's members; or

(b)by the holders of not less than fifteen percent of the company's debentures entitling the holders to object to alterations of its memorandum:

Provided that an application shall not be made by any person who has consented to or voted in favour of the alteration.

(3)An application under this section must be made within thirty days after the date on which the resolution altering the company's memorandum was passed and may be made on behalf of the persons entitled to make the application by such one or more of their number as they may appoint in writing for the purpose.

(4)On an application under this section, the court may make an order cancelling the alteration or confirming the alteration either wholly or in part and on such terms and conditions as it thinks fit, and may—

(a)if it thinks fit, adjourn the proceedings in order that an arrangement may be made to the satisfaction of the court for the purchase of the interests of dissenting members; and

(b)give such directions and make such orders as it may think expedient for facilitating or carrying into effect any such arrangements:

Provided that no part of the capital of the company shall be expended in any such purchase.

(5)The court's order may, if the court thinks fit, provide for the purchase by the company of any shares of the members of the company, and for the reduction accordingly of its capital, and may make such alterations in the company's memorandum and articles as may be required in consequence.

(6)An alteration in the memorandum or articles of a company made by virtue of an order under this section is of the same effect as if duly made by resolution, and this Act shall apply accordingly to the memorandum or articles so altered.

(7)The debentures entitling the holders to object to alterations of a company's memorandum shall be any debentures secured by a floating charge which were issued or first issued before the appointed day, or form part of the same series as any debentures so issued, and a special resolution altering a company's memorandum shall require the same notice to the holders of any such debentures as to members of the company.In default of any provisions regulating the giving of notice to any such debenture holders, the provisions of the company's articles regulating the giving of notice to members shall apply.

(8)In the case of a company which is, by virtue of a licence from the Registrar, exempted from the obligation to use the word "limited" as part of its name, a resolution altering the company's objects shall also require the same notice to the Registrar as to members of the company.

(9)Where a company passes a resolution altering its memorandum—

(a)if no application is made with respect thereto under this section, it shall within fourteen days from the end of the period for making such an application deliver to the Registrar a printed copy of its memorandum as altered; and

(b)if such an application is made it shall—

(i)immediately give notice of that fact to the Registrar; and

(ii)within fourteen days from the date of any order cancelling or confirming the alteration wholly or in part, deliver to the Registrar a certified copy of the order and, in the case of an order confirming the alteration wholly or in part, a printed copy of the memorandum as altered:

Provided that the court may by order at any time extend the time for the delivery of documents to the Registrar under subsection (9)(b) for such period as the court may think proper.

(10)If a company makes default in giving notice or delivering any document to the Registrar as required by subsection (9), the company and every officer of the company who is in default shall be liable to a default fine.

(11)The validity of an alteration of a company's memorandum under this section shall not be questioned on the ground that it was not authorised by subsection (1) except in proceedings taken for the purpose (whether under this section or otherwise) before the expiration of twenty one days after the date of the resolution in that behalf; and where any such proceedings are taken otherwise than under this section, subsections (9) and (10) shall apply in relation thereto as if they had been taken under this section and as if an order declaring the alteration invalid were an order cancelling it and as if an order dismissing the proceedings were an order confirming the alteration.

(12)In relation to a resolution for altering the provisions of a company's memorandum with respect to the objects of the company passed before the appointed day, this section shall have effect as if, in lieu of the proviso to subsection (1) and subsections (2) to (11), there had been enacted herein the provisions of subsections (2) to (8) of section 7 of the repealed Companies Act⁸.⁸R.L. Cap 212

Memorandum and Articles of Association (ss. 9-23)

9. Articles prescribing regulations for companies

(1)There may in the case of a company limited by shares, and there shall in the case of a company limited by guarantee or unlimited, be registered with the memorandum and articles of association, which shall be signed by the subscribers to the memorandum and shall contain the regulations for the company.

(2)Articles shall be—

(a)in the English or Kiswahili language;[paragraph (a) amended by section 20 of Act 3 of 2012]

(b)printed;

(c)divided into paragraphs numbered consecutively; and

(c)signed by each subscriber to the memorandum of association in the presence of at least one witness, who shall attest the signature and add his occupation and postal address.

10. Regulations required in case of unlimited company or company limited by guarantee

(1)In the case of an unlimited company, the articles must state the number of members with which the company proposes to be registered and, if the company has a share capital, the amount of share capital with which the company proposes to be registered.

(2)In the case of a company limited by guarantee, the articles must state the number of members with which the company proposes to be registered.

(3)Where an unlimited company or a company limited by guarantee has increased the number of its members beyond the registered number, it shall, within fourteen days after the increase was resolved on or took place, give to the Registrar notice of the increase, and the Registrar shall record the increase.If default is made in complying with this subsection, the company and every officer of the company who is in default shall be liable to a default fine.

11. Adoption and application of Table A

(1)A public or private company may, as applicable, for its articles of association, adopt all or any of the regulations contained in Table A. In any case where a company adopts all or any of the regulations in Table A, a printed copy of Table A shall be annexed to or incorporated in each copy of its articles of association.

(2)In the case of a company limited by shares and registered after the commencement of this Act, if articles are not registered, or, if articles are registered, in so far as the articles do not exclude or modify the regulations contained in Table A, Table A shall, so far as applicable, constitute the articles of the company in the same manner and to the same extent as if articles in the form of Table A had been duly registered.

12. Statutory forms of memorandum and articles

(1)The form of—

(a)the memorandum of association of a company limited by shares;

(b)the memorandum and articles of association of a company limited by guarantee and not having a share capital;

(c)the memorandum and articles of association of a company limited by guarantee and having a share capital;

(d)the memorandum and articles of association of an unlimited company having a share capital,

shall be respectively in accordance with the forms set out in Tables B, C, D and E in the Schedule to this Act, or as near thereto as circumstances admit.

(2)In any case where a company adopts all or any of the regulations in Table C, a printed copy of Tables A and C shall be annexed to or incorporated in each copy of its articles of association.

13. Alteration of articles

(1)Subject to the provisions of this Act and to the conditions contained in its memorandum, a company may by special resolution alter its articles.

(2)Any alteration so made in the articles shall, subject to the provisions of this Act, be as valid as if originally contained therein, and be subject in like manner to alteration by special resolution.

14. Registration of memorandum and articles

(1)The memorandum and the articles, if any, shall be delivered to the Registrar for registration.

(2)With the memorandum there shall be delivered a statement in the prescribed form containing the name and address (or registered office) e-mail adresses, telephone, fax numbers and websites, if any of—

(a)the person or persons being the first director or directors of the company;

(b)the person or persons being the first secretary or joint secretaries of the company; and in the case of a first director or directors, particulars of any other directorships held during the five years preceding the date on which the statement is delivered to the Registrar.

[subsection (2) amended by section 21 of Act 3 of 2012]

(3)There shall in the statement be specified the intended address of the company's registered office on incorporation.

(4)The Registrar shall not register a company's memorandum delivered under this section unless he is satisfied that all the requirements of this Act have been complied with.

(5)The Registrar shall not register the memorandum of an open-ended investment company delivered under this section unless he is satisfied that the memorandum and the articles of association delivered with it have previously been approved by the Capital Markets and Securities Authority.

15. Effect of registration

(1)On the registration of the memorandum of a company the Registrar shall certify under his hand that the company is incorporated and, in the case of a limited company, that the company is limited, and, in the case of a public company, that the company is a public company.

(2)From the date of incorporation mentioned in the certificate of incorporation, the subscribers to the memorandum, together with such other persons as may from time to time become members of the company, shall be a body corporate by the name contained in the memorandum, capable of exercising all the functions of an incorporated company, but with such liability on the part of the members to contribute to the assets of the company in the event of its being wound up as provided for in this Act.

16. Conclusiveness of certificate of incorporation

(1)A certificate of incorporation given by the Registrar in respect of any association shall be conclusive evidence that all the requirements of this Act in respect of registration and of matters precedent and incidental thereto have been complied with and that the association is a company authorised to be registered and duly registered under this Act.

(2)A statutory declaration by an advocate of the High Court engaged in the formation of the company, or by a person named in the articles as a director or secretary of the company, of compliance with all or any of the said requirements shall be produced to the Registrar, and the Registrar may accept such a declaration as sufficient evidence of compliance.

17. Registration of unlimited company as limited

(1)Subject to the provisions of this section, a company registered as unlimited may register under this Act as limited, but the registration of an unlimited company as a limited company shall not affect the rights or liabilities of the company in respect of any debt or obligation incurred, or any contract entered into, by, to, with, or on behalf of the company before the registration.

(2)On registration in pursuance of this section, the Registrar shall close the former registration of the company, and may dispense with the delivery to him of copies of any documents with copies of which he was furnished on the occasion of the original registration of the company, but save as above, the registration shall take place in the same manner and shall have effect as if it were the first registration of the company under this Act.

18. Effect of memorandum and articles

(1)Subject to the provisions of this Act, the memorandum and articles shall, when registered, bind the company and the members thereof to the same extent as if they respectively had been signed and sealed by each member, and contained covenants on the part of each member to observe all the provisions of the memorandum and of the articles.

(2)All money payable by any member to the company under the memorandum or articles shall be a debt due from him to the company.

19. Memorandum and articles of a company limited by guarantee

(1)In the case of a company limited by guarantee and not having a share capital and being registered after 1 October 1932, every provision in the memorandum or articles, or any resolution of the company purporting to give any person a right to participate in the divisible profits of the company otherwise than as a member shall be void.

(2)For the purpose of the provisions of this Act relating to the memorandum of a company limited by guarantee and of this section, every provision in the memorandum or articles, or in any resolution, of a company limited by guarantee and registered on or after the date aforesaid, purporting to divide the undertaking of the company into shares or interests shall be treated as a provision for a share capital, notwithstanding that the nominal amount or number of the shares or interests is not specified thereby.

20. Effect of alteration on company's members

Notwithstanding anything in the memorandum or articles of a company, no member of the company shall be bound by an alteration made in the memorandum or articles after the date on which he became a member, if and so far as the alteration—

(a)requires him to take or subscribe for more shares than the number held by him at the date on which the alteration is made; or

(b)in any way increases his liability as at that date to contribute to the share capital of, or otherwise to pay money to, the company:

Provided that this section shall not apply in a case where the member agrees in writing, either before or after the alteration is made, to be bound by the alteration.

21. Power to alter conditions in memorandum which could have been contained in articles

(1)Subject to the provisions of section 20 and section 233, any condition contained in a company's memorandum which could lawfully have been contained in articles of association instead of in the memorandum may, subject to the provisions of this section, be altered by the company by special resolution:Provided that if an application is made to the court for the alteration to be cancelled, it shall not have effect except in so far as it is confirmed by the court.

(2)This section shall not apply where the memorandum itself provides for or prohibits the alteration of all or any of the said conditions, and shall not authorise any variation or abrogation of the special rights of any class of members.

(3)Subsections (2) to (8) of section 8 (except subsection (2)(b)) shall apply in relation to any alteration and to any application made under this section as they apply in relation to alterations and to applications made under that section.

(4)This section shall apply to a company's memorandum whether registered before or after the commencement of this Act.

22. Copies of memorandum and articles to be given to members

(1)A company shall, on being so required by any member, send to him a copy of the memorandum and of the articles, if any, and a copy of any Act or Ordinance which alters the memorandum, subject to payment, in the case of a copy of the memorandum and of the articles of such fee as the Minister may prescribe in regulations, and in the case of a copy of an Act, of such sum not exceeding the published price thereof.

(2)If a company makes default in complying with this section, the company and every officer of the company who is in default shall be liable for each offence to a fine.

23. Issued copies of memorandum to embody alterations

(1)Where an alteration is made in the memorandum of a company, every copy of the memorandum issued after the date of the alteration shall be in accordance with the alteration.

(2)If, where any such alteration has been made, the company at any time after the date of the alteration issues any copies of the memorandum which are not in accordance with the alteration, it shall be liable to a fine for each copy so issued, and every officer of the company who is in default shall also be liable to a fine.

Membership of Company (ss. 24-26)

24. Definition of member

(1)The subscribers to the memorandum of a company shall be deemed to have agreed to become members of the company, and on its registration shall be entered as members in its register of members.

(2)Every other person who agrees to become a member of a company, and whose name is entered in its register of members, shall be a member of the company.

25. Membership of holding company

(1)Except as mentioned in this section, a body corporate cannot be a member of a company which is its holding company, and any allotment or transfer of shares in a company to its subsidiary shall be void.

(2)Nothing in this section shall apply where the subsidiary is concerned as personal representative, or as trustee, unless the holding company or a subsidiary thereof is beneficially interested under the trust and is not so interested only by way of security for the purposes of a transaction entered into by it in the ordinary course of business which includes the lending of money.

(3)This section shall not prevent a subsidiary which is, at the appointed day, a member of its holding company, from continuing to be a member but, subject to subsection (2), the subsidiary shall have no right to vote at meetings of the holding company or any class of members thereof.The provisions of this section shall apply to a nominee acting on behalf of a subsidiary as to the subsidiary itself.

(4)In relation to a company, other than a company limited by shares, the references in this section to shares shall be construed as references to the interests of its members as such, whatever the form of that interest.

26. Members severally liable for debts where business carried on with fewer than two members

(1)If at any time the number of members of a company is reduced below two, and it carries on business for more than six months while the number is so reduced, every person who is a member of the company during the time that it so carries on business after those six months and knows that it is carrying on business with fewer than two members, shall be liable (jointly and severally with the company) for the payment of the whole debt of the company contracted during that time save for limited liability single shareholder company;[subsection (1), previously unnumbered, numbered by section 22(a) and amended by section 22(b) of Act 3 of 2012]

(2)The single shareholder shall, where he contravenes the provisions of this Act, be sued personally and in his own name.[subsection (2) added by section 22(c) of Act 3 of 2012]

26A. Single shareholder

(1)A limited liability single shareholder company shall be formed by one member.

(2)The company’s list of members shall contain:

(a)the name and address of the sole member; and

(b)identification and a statement that the company contains only one member.

(3)Where the membership o f a limited liability single shareholder company increases from one to two or more, the occurrence of that event shall be entered into the company’s register of members with—

(a)the name and address of the person who was formerly the sole member;

(b)a statement that the company ceased to have one member; and

(c)the date on which that event occurred.

(4)A company or any officer of the company who contravenes the provisions of this section commits an offence and shall on conviction be liable to a fine of shillings five million or to imprisonment for a term of two years or to both.

(5)The Minister may make regulations and rules for carrying out the provisions of this section.

[section 26A inserted by section 23 of Act 3 of 2012]

Private companies (ss. 27-29)

27. Meaning of "private company"

(1)A "private company" means a company which by its articles—

(a)restricts the right to transfer its shares; and

(b)limits the number of its members to fifty, not including persons who are in the employment of the company and persons who, having been formerly in the employment of the company, were while in that employment, and have continued after the determination of that employment to be, members of the company; and

(c)prohibits any invitation to the public to subscribe for any shares or debentures of the company.

(2)Where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this section, be treated as a single member.

28. Consequences of default in complying with conditions constituting a private company

Where the articles of a company include the provisions which, under section 27 are required to be included in the articles of a company in order to constitute it a private company but default is made in complying with any of those provisions, the company shall cease to be entitled to any privilege or exemption conferred on private companies under any of the provisions of this Act, and thereupon the provisions of this Act shall apply to the company as if it were a public company:Provided that the court, on being satisfied that the failure to comply with the conditions was accidental or due to inadvertence or to some other sufficient cause, or that on other grounds it is just and equitable to grant relief, may on the application of the company or any other person interested and on such terms and conditions as seem to the court just and expedient, order that the company be relieved from such consequences as aforesaid.

29. Company ceasing to be private company

(1)If a private company alters its articles such that they no longer include the provisions required under section 27, the company shall, as on the date of the alteration, cease to be a private company and shall amend its memorandum so as to state that it is a public company. Within a period of fourteen days, it shall send notification to the Registrar in the prescribed form along with a copy of the memorandum as altered. The Registrar shall then issue a certificate to the effect that the company is a public company.

(2)If default is made in complying with subsection (1), the company and every officer of the company who is in default shall be liable to a default fine.

Chapter II
Company names (ss. 30-34)

30. Reservation of name and prohibition of undesirable name

(1)The Registrar may, on written application, reserve a name pending registration of a company or a change of name by a company. Any such reservation shall remain in force for a period of thirty days or such longer period not exceeding sixty days, as the Registrar may, for special reasons, allow, and during such period no other company shall be entitled to be registered with that name.

(2)No name shall be reserved and no company shall be registered by a name which, in the opinion of the Registrar, is the same as or too like a name appearing in the index of company names or is otherwise undesirable.

31. Change of name

(1)A company may by special resolution and, with the approval of the Registrar signified in writing change its name. If the Registrar refuses to give his approval, he shall give his reasons.

(2)If, through inadvertence or otherwise, a company on its first registration or on its registration by a new name is registered by a name which, in the opinion of the Registrar, is too like the name by which a company in existence is registered, the first mentioned company may change its name with the sanction of the Registrar and, if he so directs within six months of its being registered by that name, shall change it within a period of six weeks from the date of the direction or such longer period as the Registrar may think fit to allow.

(3)Where a company changes its name under this section, it shall within fourteen days give to the Registrar notice thereof and the Registrar shall, subject to the provisions of section 30(2), enter the new name on the register in place of the former name, and shall issue to the company a certificate of change of name, and shall notify such change of name in the Gazette.

(4)A change of name by a company under this section shall not affect any rights or obligations of the company or render defective any legal proceedings by or against the company, and any legal proceedings that might have been continued or commenced against it by its former name may be continued or commenced against it by its new name.

32. Power to dispense with "Limited"

(1)Where it is proved to the satisfaction of the Registrar that an association about to be formed as a private company is to be formed for promoting commerce, art, science, education, religion, charity or any other useful or social object, and intends to apply its profits, if any, or other income in promoting its objects, and to prohibit the payment of any dividend to its members, the Registrar may by licence direct that the association may be registered as a private company with limited liability, without the addition of the word "limited" to its name, and the association may be registered accordingly and shall on registration, enjoy all the privileges and (subject to the provisions of this section) be subject to all the obligations of limited companies.

(2)Where it is proved to the satisfaction of the Registrar—

(a)that the objects of the company are restricted to those specified in subsection (1) and to objects incidental or conducive thereto;

(b)that by its constitution the company is required to apply its profits, if any, or other income in promoting its objects and is prohibited from paying any dividend to its members; and

(c)that by its constitution the company is required on its winding up to transfer all the assets which would otherwise be generally available to the members either to another body with objects similar to its own or to another body the objects of which are the promotion of charity or anything incidental or conducive thereto,

the Registrar may by licence authorise the company to make by special resolution a change in its name including or consisting of the omission of the word "limited" and sections 31(3) and 31(4) shall apply to a change of name under this subsection as they apply to a change of name under that section.

(3)A licence by the Registrar under this section may be granted on such conditions and subject to such regulations as the Registrar thinks fit, and those conditions and regulations shall be binding on the body to which the licence is granted, and where the grant is under subsection (1) shall, if the Registrar so directs, be inserted in the memorandum and articles, or in one of those documents.

(4)A company which is exempted from requirements relating to the use of the word "limited" and does not include that word as part of its name, is also exempted from the requirements of this Act relating to the publication of its name and the sending of lists of members to the Registrar of companies.

(5)The Registrar may revoke a licence under this section and upon revocation the Registrar shall enter in the register the word "limited" at the end of the name of the body to which it was granted, and the body shall cease to enjoy the exemptions granted by this section:Provided that, before any revocation is effected, the Registrar shall give to the body in writing a statement of his intention, and shall afford it an opportunity of being heard in opposition to the revocation.

(6)A body in respect of which a licence under this section is in force may not alter the provisions of its memorandum or its articles with respect to those requirements referred to in subsection (2) without the consent of the Registrar. The Registrar may (unless he sees fit to revoke the licence) vary the licence by making it subject to such conditions and regulations as he may think fit, in lieu of or in addition to the conditions and regulations, if any, to which the licence was formerly subject.

(7)If the body makes default in complying with the requirements of this subsection, the body and every officer of the body who is in default shall be liable to a default fine.

33. Power to require company to abandon misleading name

(1)If in the Minister's opinion the name by which a company is registered gives so misleading an indication of the nature of its activities as to be likely to cause harm to the public, he may direct it to change its name.

(2)The direction must, if not duly made the subject of an application to the court under subsection (3), be complied with within a period of 6 weeks from the date of the direction or such longer period as the Registrar may think fit to allow.

(3)The company may, within a period of 3 weeks from the date of the direction, apply to the court to set it aside; and the court may set the direction aside or confirm it and, if it confirms the direction, shall specify a period within which it must be complied with.

(4)If a company makes default in complying with a direction under this section, it is liable to a fine and, for continued contravention, to a default fine.

(5)Where a company changes its name under this section, the Registrar shall enter the new name on the register in place of the former name, and shall issue a certificate of incorporation altered to meet the circumstances of the case; and the change of name has effect from the date on which the altered certificate is issued.

(6)A change of name by a company under this section does not affect any of the rights or obligations of the company, or render defective any legal proceedings by or against it; and any legal proceedings that might have been continued or commenced against it under its former name may be continued or commenced against it under its new name.

34. Penalty for improper use of "limited" or "public limited company" etc.

(1)If any person trades or carries on any business or profession under a name or title of which "limited", or any contractions or imitation of that word, is the last word, that person, unless duly incorporated with limited liability, is guilty of an offence.

(2)A person who is not a public company is guilty of an offence if he carries out any trade, profession or business under a name which includes, as its last part, the words "public limited company" or any contractions thereof.

(3)A public limited company is guilty of an offence if in circumstances in which the fact that it is a public company is likely to be material to any person, it uses a name which may reasonably be expected to give the impression that it is a private company.

(4)A person guilty of an offence under subsections (1), (2) or (3) and, if that person is a company, any officer of the company who is in default, is liable to a fine and, for continued contravention, to a default fine.

Chapter III
A company's capacity; formalities of carrying on business (ss. 35-44)

35. A company's capacity not limited by its memorandum

(1)The validity of an act done by a company shall not be called into question on the ground of lack of capacity by reason of anything in the company's memorandum.

(2)A member of a company may bring proceedings to restrain the doing of an act which but for subsection (1) would be beyond the company's capacity; but no such proceedings shall lie in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the company.

36. Power of directors to bind the company

(1)Subject to subsection (5), in favour of a person dealing with a company in good faith, the power of the board of directors to bind the company, or authorise others to do so, shall be deemed to be free of any limitation under the company's constitution.

(2)For this purpose—

(a)a person "deals with" a company if he is a party to any transaction or other act to which the company is a party;

(b)a person shall not be regarded as acting in bad faith by reason only of his knowing that an act is beyond the powers of the directors under the company's constitution; and

(c)a person shall be presumed to have acted in good faith unless the contrary is proved.

(3)The references above to limitations on the directors' power under the company's constitution include limitations deriving—

(a)from a resolution of the company in general meeting or a meeting of any class of shareholders; or

(b)from any agreement between the members of the company or of any class of shareholders.

(4)Subsection (1) does not affect any right of a member of the company to bring proceedings to restrain the doing of an act which is beyond the powers of the directors; but no such proceedings shall lie in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the company. Nor does that subsection affect any liability incurred by the director, or any other person, by reason of the directors' exceeding their powers.

(5)This section shall not apply in relation to any transaction or other act to which the company is a party where the person dealing with the company is a director of that company or its holding company or a connected person as defined in section 200(4).

37. No duty to enquire as to capacity of company or authority of Directors

A party to a transaction with a company is not bound to enquire as to whether it is permitted by the company's memorandum or as to any limitation on the powers of the board of directors to bind the company or authorise others to do so.

38. Company contracts

A contract may be made—

(a)by a company, by writing under its common seal; or

(b)on behalf of a company, by any person acting under its authority, express or implied, and any formalities required by law in the case of a contract made by an individual also apply, unless a contrary intention appears, to a contract made by or on behalf of a company.

39. Execution of documents

(1)A document is executed by a company by the affixing of its common seal. A company need not have a common seal, however, and the following subsections apply whether it does or not.

(2)A document signed by a director and the secretary of a company, or by two directors of a company, and expressed (in whatever form of words) to be executed by the company has the same effect as if executed under the common seal of the company.

(3)A document executed by a company which makes it clear on its face that it is intended by the person or persons making it to be a deed has effect, upon delivery, as a deed; and it shall be presumed, unless a contrary intention is proved, to be delivered upon its being so executed.

(4)In favour of a purchaser, a document shall be deemed to have been duly executed by a company if it purports to be signed by a director and the secretary of the company, or by two directors of the company, and where it makes it clear on its face that it is intended by the person or persons making it to be a deed, shall be deemed to have been delivered upon its being executed.A "purchaser" means a purchaser in good faith for valuable consideration and includes a lessee, mortgagee or other person who for valuable consideration acquires an interest in property.

(5)For the purposes of any enactment providing for a document to be executed by a company by affixing its common seal, or referring in whatever terms to a document so executed, a document signed or subscribed by or on behalf of the company in accordance with the provisions of this Act shall have effect as if so executed.

40. Pre-incorporation contracts, deeds and obligations

(1)A contract which purports to be made by or on behalf of a company at a time when the company has not been formed has effect, subject to any agreement to the contrary, as one made with the person purporting to act for the company or as agent for it, and he is personally liable on the contract accordingly.

(2)Subsection (1) applies to the making of a deed as it applies to the making of a contract.

41. Bills of exchange and promissory notes

A bill of exchange or promissory note shall be deemed to have been made, accepted, or endorsed on behalf of a company if made, accepted, or endorsed in the name of, or by or on behalf or on account of, the company by any person acting under its authority, expressly or impliedly.

42. Execution of deeds abroad

(1)A company may, by writing under its common seal, empower any person, either generally or in respect of any specified matters, as its attorney, to execute deeds on its behalf in any place outside Tanzania.

(2)A deed signed by such an attorney on behalf of the company and under his seal shall bind the company and have the same effect as if it were under its common seal.

43. Power for company to have official seal for use abroad

(1)A company which has a common seal whose objects require or comprise the transaction of business outside Tanzania may, if authorised by its articles, have for use in any place outside Tanzania, an official seal, which shall be a facsimile of the common seal of the company, with the addition on its face of the name of every place where it is to be used.

(2)A deed or other document to which an official seal is duly affixed shall bind the company as if it had been sealed with the common seal of the company.

(3)A company having an official seal for use in any such place may, by writing under its common seal, authorise any person appointed for the purpose in that place, to affix the official seal to any deed or other document to which the company is party in that place.

(4)The authority of any such agent shall, as between the company and any person dealing with the agent, continue during the period, if any, mentioned in the instrument conferring the authority, or if no period is there mentioned, then until notice of the revocation or determination of the agent's authority has been given to the person dealing with him.

(5)The person affixing any such official seal shall, by writing under his hand, certify on the deed or other instrument to which the seal is affixed, the date on which and the place at which it is affixed.

44. Authentication of documents

A document or proceeding requiring authentication by a company may be signed by a director, secretary, or other authorised officer of the company, and need not be under its common seal.

Part III – Share capital and debentures (ss. 45-95)

45. Public and private companies

(1)In this part, sections 46 to 54 and 58 shall apply to public companies only.

(2)A private company (other than a company limited by guarantee and not having a share capital) commits an offence if it—

(a)offers to the public (whether for cash or otherwise) any shares in or debentures of the company; or

(b)allots or agrees to allot (whether for cash or otherwise) any shares in or debentures of the company with a view to all or any of those shares or debentures being offered for sale to the public.

(3)A company is guilty of an offence under subsection (2), and any officer of it who is in default, is liable to a fine.

(4)Nothing in this section affects the validity of any allotment or sale of shares or debentures, or of any agreement to allot or sell shares or debentures.

Offer documents (ss. 46-53)

46. Dating of offer document

An offer document issued by or on behalf of a company or in relation to an intended company shall be dated, and that date shall, unless the contrary is proved, be taken as the date of publication of the offer document.

47. Matters to be stated and reports to be set out in offer document

(1)Every offer document issued by or on behalf of a company, or by or on behalf of any person who is or has been engaged or interested in the formation of the company, must state the matters specified and contain the reports required to be included from time to time in regulations made by the Minister for the time being responsible for finance, or by the Capital Markets and Securities Authority or such other authority as may be designated by that Minister for the purpose.

(2)A condition requiring or binding an applicant for shares in or debentures of a company to waive compliance with any requirement of this section, or purporting to affect him with notice of any contract, document or matter not specifically referred to in the offer document, shall be void.

(3)It shall not be lawful to issue any form of application for shares in or debentures of a company unless the form is issued with an offer document which complies with the requirements of this section.

(4)In the event of non-compliance with or contravention of any of the requirements of this section, a director or other person responsible for the offer document shall not incur any liability by reason of the non-compliance or contravention, if—

(a)as regards any matter not disclosed, he proves that he had no knowledge thereof; or

(b)he proves that the non-compliance or contravention arose from an honest mistake of fact on his part; or

(c)the non-compliance or contravention was in respect of matters which in the opinion of the court dealing with the case were immaterial or was otherwise such as ought, in the opinion of that court, having regard to all the circumstances of the case, reasonably to be excused.

(5)This section shall apply to an offer document or a form of application whether issued on or with reference to the formation of a company or subsequently.

(6)Nothing in this section shall limit or diminish any liability which any person may incur under the general law or this Act.

(7)If any person acts in contravention of the provisions of this section, he shall be liable to a fine.

48. Expert's consent to issue of offer document containing statement by him

(1)An offer document inviting persons to subscribe for shares in or debentures of a company and including a statement purporting to be made by an expert shall not be issued unless—

(a)he has given and has not, before delivery of a copy of the offer document for registration, withdrawn his written consent to the issue thereof with the statement included in the form and context in which it is included; and

(b)a statement that he has given and has not withdrawn his consent appears in the offer document.

(2)If any offer document is issued in contravention of this section the company and every person who is knowingly a party to the issue thereof shall be liable to a fine.

(3)In this Part the expression "expert" includes engineer, valuer, accountant and any other person whose profession gives authority to a statement made by him.

49. Registration of offer document

(1)No offer document shall be issued by or on behalf of a company or in relation to an intended company unless, on or before the date of its publication, there has been delivered to the Registrar for registration a copy thereof approved by the Capital Markets and Securities Authority and signed by every person who is named therein as a director or proposed director of the company, or by his agent authorised in writing, and having endorsed thereon or attached thereto—

(a)any consent to the issue of the offer document required by section 48 from any person as an expert; and

(b)a copy of any contract, statement or other document required pursuant to section 47.

(2)Every offer document shall—

(a)state that a copy has been delivered for registration as required by this section; and

(b)specify, or refer to statements included in the offer document which specify, any documents required by this section to be endorsed on or attached to the copy so delivered.

(3)The Registrar shall not register an offer document unless it is dated, approved by the Capital Markets and Securities Authority, and the copy thereof signed as required by this section, and unless it has endorsed thereon or attached thereto the documents (if any) specified as above.

(4)If an offer document is issued without a copy thereof being delivered in accordance with this section to the Registrar or without the copy so delivered having attached thereto the required documents, the company, and every person who is knowingly a party to the issue of the offer document, shall be liable to a fine for every day from the date of the issue of the offer document until a copy thereof is so delivered with the required documents attached thereto.

50. Civil liability for misstatements in offer document

(1)Subject to the provisions of this section, where an offer document invites persons to acquire shares in or debentures of a company, the following persons shall be liable to pay compensation to all persons who acquire any shares or debentures in reliance on the offer document for the loss or damage they may have sustained by reason of any untrue statement included therein—

(a)the company or, where the company does not offer the shares or debentures, the offeror thereof;

(b)every person who is a director of the company or, as the case may be, the offeror at the time of the issue of the offer document;

(c)every person who has authorised himself to be named and is named in the offer document as a director of the company, or as the case may be, the offeror or as having agreed to become such a director whether immediately or after an interval of time;

(d)every person being a promoter of the company; and

(e)every person who has authorised the issue of the offer document or any part thereof:

Provided that where, under section 48, the consent of a person is required to the issue of an offer document and he has given that consent, he shall not by reason of his having given it be liable under this subsection as a person who has authorised the issue of the offer document except in respect of an untrue statement purporting to be made by him as an expert.

(2)A person shall not incur any liability under this section if at the time when the offer document was delivered for registration he reasonably believed, having made such enquiries (if any) as were reasonable, that the untrue statement was true and not misleading or that the matter whose omission caused the loss was properly omitted and—

(a)he continued in that belief until the time when the shares or debentures were acquired; or

(b)they were acquired before it was reasonably practicable to bring a correction to the attention of persons likely to acquire the shares or debentures in question; or

(c)before the same were acquired he had taken all such steps as it was reasonable for him to have taken to secure that a correction was immediately brought to the attention of those persons; or

(d)the shares or debentures were acquired after such a lapse of time that he ought in the circumstances to be reasonably excused and, if the same are dealt in on a stock exchange, that he continued in that belief until after the commencement of dealings therein on that exchange.

(3)A person shall not incur any liability under this section for any loss caused by a statement purporting to be made by or on the authority of another person as an expert which is, and is stated to be, included in the offer document with that other person's consent if at the time when the offer document was delivered for registration he believed on reasonable grounds that the other person was competent to make or authorise the statement and had consented to its inclusion in the form and context in which it was included and—

(a)he continued in that belief until the time when the shares or debentures were acquired; or

(b)they were acquired before it was reasonably practicable to bring the fact that the expert was not competent or had not consented to the attention of persons likely to acquire the shares or debentures in question; or

(c)before the same were acquired he had taken all such steps as it was reasonable for him to have taken to secure that the fact was immediately brought to the attention of those persons; or

(d)the shares or debentures were acquired after such a lapse of time that he ought in the circumstances to be reasonably excused and, if the same are dealt in on a stock exchange, he continued in that belief until after the commencement of dealings therein on that exchange.

(4)A person shall not incur any liability under this section for any loss caused by any such statement or omission if—

(a)before the shares or debentures were acquired, a correction or, where the statement was such as is mentioned in subsection (3), the fact that the expert was not competent or had not consented had been published in a manner calculated to bring it to the attention of persons likely to acquire the shares or debentures in question; or

(b)he took all such steps as it was reasonable for him to take to secure such publication and reasonably believed that it had taken place before the shares or debentures were acquired.

(5)A person shall not incur any liability under this section for any loss resulting from a statement made by a public official or contained in a public official document which is included in the offer document if the statement was accurately and fairly reproduced.

(6)A person shall not incur any liability under this section if the person suffering the loss acquired the shares or debentures in question with knowledge that the statement was untrue.

(7)For the purposes of subsection (1), the expression "promoter" means a promoter who was a party to the preparation of the offer document, or of the portion thereof containing the untrue statement, but does not include any person by reason of his acting in a professional capacity for persons engaged in procuring the formation of the company.

51. Criminal liability for misstatements in offer document

(1)Where an offer document issued after the commencement of this Act includes any untrue statement, any person who authorised the issue of the offer document shall be liable on conviction to imprisonment, or a fine, or both, unless he proves either that the statement was immaterial or that he had reasonable ground to believe and did, up to the time of the issue of the offer document, believe that the statement was true.

(2)A person shall not be deemed for the purpose of this section to have authorised the issue of an offer document by reason only of his having given the consent required by section 48 to the inclusion therein of a statement purporting to be made by him as an expert.

52. Document containing offer of shares or debentures for sale to be deemed offer document

(1)Where a company allots or agrees to allot any shares in or debentures of the company with a view to all or any of those shares or debentures being offered for sale to the public, any document by which the offer for sale to the public is made shall for all purposes be deemed to be an offer document issued by the company, and the provisions of this Part and all or any rules of law as to the contents of offer documents and to liability in respect of statements in and omissions from offer documents, or otherwise relating to offer documents, shall apply and have effect accordingly, as if the shares or debentures had been offered to the public for subscription and as if persons accepting the offer in respect of any shares or debentures were subscribers for those shares or debentures, but without prejudice to the liability, if any, of the persons by whom the offer is made in respect of misstatements contained in the document or otherwise in respect thereof.

(2)For the purposes of this Act, it shall, unless the contrary is proved, be evidence that an allotment of, or an agreement to allot shares or debentures was made with a view to the shares or debentures being offered for sale to the public if it is shown—

(a)that an offer of the shares or debentures or of any of them for sale to the public was made within six months after the allotment or agreement to allot; or

(b)that at the date when the offer was made the whole consideration to be received by the company in respect of the shares or debentures had not been so received.

(3)Section 47 as applied by this section shall have effect as if it is required by an offer document to state in addition to the matters required by or pursuant to that section to be stated in an offer document—

(a)the net amount of the consideration received or to be received by the company in respect of the shares or debentures to which the offer relates; and

(b)the place and time at which the contract under which the said shares or debentures have been or are to be allotted may be inspected,

and section 49 as applied by this section shall have effect as though the persons making the offer were persons named in an offer document as directors of a company.

(4)Where a person making an offer to which this section relates is a company or a firm, it shall be sufficient if the document is signed on behalf of the company or firm by two directors of the company or not less than half of the partners of the firm, as the case may be, and any such director or partner may sign by his agent authorised in writing.

53. Interpretation of provisions relating to offer documents

For the purpose of the foregoing provisions of this Part—

(a)a statement included in an offer document shall be deemed to be untrue if it is misleading in the form and context in which it is included; and

(b)a statement shall be deemed to be included in an offer document if it is contained therein or in any report or memorandum appearing on the face thereof or by reference incorporated therein or issued therewith.

Allotment (ss. 54-55)

54. Requirements as to allotments

Requirements as to allotments of shares or debentures pursuant to the issue of an offer document, the effect of irregular allotments and other related matters shall be as prescribed from time to time in regulations made by the Minister for the time being responsible for finance, or by the Capital Markets and Securities Authority or such other authority designated for the purpose.

55. Return as to allotments

(1)Whenever a company limited by shares or a company limited by guarantee and having a share capital makes any allotment of its shares, the company shall within sixty days thereafter deliver to the Registrar for registration—

(a)a return of the allotments, stating the number and nominal amount of the shares comprised in the allotment, the names, addresses and descriptions of the allottees, and the amount, if any, paid or due and payable on each share; and

(b)in the case of shares allotted as fully or partly paid up otherwise than in cash, a contract in writing constituting the title of the allottees to the allotment together with any contract of sale, or for services or other consideration in respect of which that allotment was made, such contracts being duly stamped, and a return stating the number and nominal amount of shares so allotted, the extent to which they are to be treated as paid up, and the consideration for which they have been allotted.

(2)Where such a contract as above-mentioned is not reduced to writing, the company shall within sixty days after the allotment deliver to the Registrar for registration the prescribed particulars of the contract stamped with the same stamp duty as would have been payable if the contract had been reduced to writing, and those particulars shall be deemed to be an instrument within the meaning of the Stamp Duty Act⁹, and the Registrar may as a condition of filing the particulars, require that the duty payable thereon be adjudicated under section 38 of that Act.⁹Cap. 189

(3)If default is made in complying with this section, every officer of the company who is in default shall be liable to a default fine.

Commissions and discounts, financial assistance (ss. 56-57)

56. Power to pay certain commissions, and prohibitions of payment of all other commissions, discounts, etc.

(1)It shall be lawful for a company to pay a commission to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares in the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares in the company if—

(a)the payment of the commission is authorised by the articles;

(b)the commission paid or agreed to be paid does not exceed ten percent of the price at which the shares are issued or the amount or rate authorised by the articles, whichever is the less;

(c)the amount or rate percent of the commission paid or agreed to be paid is in the case of shares offered to the public for subscription, disclosed in the offer document; and

(d)the number of shares which persons have agreed for a commission to subscribe absolutely is disclosed in the manner aforesaid.

(2)Save as aforesaid, no company shall apply any of its shares or capital money either directly or indirectly in payment of any commission, discount or allowance, to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares in the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares in the company, whether the shares or money be so applied by being added to the purchase money of any property acquired by the company or to the contract price of any work to be executed for the company, or the money be paid out of the nominal purchase money or contract price, or otherwise.

(3)Nothing in this section shall affect the power of any company to pay such brokerage as it has prior to the appointed day been lawful for a company to pay.

(4)A vendor to, promoter of, or other person who receives payment in money or shares from a company shall have and shall be deemed always to have had power to apply any part of the money or shares so received in payment of any commission, the payment of which, if made directly by the company, would have been legal under this section.

57. Prohibition of provision of financial assistance by company for purchase or subscription for its own, or its holding company's shares

(1)Subject as provided in this section, it shall not be lawful for a company to give, whether directly or indirectly, and whether by means of a loan, guarantee, the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for any shares in the company, or, where the company is a subsidiary company, in its holding company:Provided that nothing in this section shall be taken to prohibit—

(a)where the lending of money is part of the ordinary business of a company, the lending of money by the company in the ordinary course of its business;

(b)the provision by a company, in accordance with any scheme for the time being in force, of money for the purchase of, or subscription for, fully paid shares in the company or its holding company or any subsidiary of it or its holding company, being a purchase or subscription by trustees of or for shares to be held by or for the benefit of employees or former employees or the dependants of any of them of the company or any such other company, including any director holding a salaried employment or office in the company or any such other company;

(c)the making by a company of loans to persons other than directors, bona fide in the employment of the company with a view to enabling those persons to purchase or subscribe for fully paid shares in the company or its holding company to be held by themselves by way of beneficial ownership;

(d)the lawful distribution by a company of any of its assets by way of dividends or otherwise.

(2)If a company acts in contravention of this section, the company and every officer of the company who is in default shall be liable to a fine.

(3)The Capital Markets and Securities Authority may certify that the provisions of subsection (1) shall not apply to a company in respect of any particular transaction.

(4)This section shall not apply to private companies.

Construction of references to offering shares or debentures to the public (s. 58)

58. Construction of references to offering shares or debentures to the public

(1)Any reference in this Act to offering shares or debentures to the public shall, subject to any provision to the contrary contained therein, be construed as including a reference to offering them to any section of the public, whether selected as members or debenture holders of the company concerned or as clients of the person issuing the offer document or in any other manner, and references in this Act or in a company's articles to invitations to the public to subscribe for shares or debentures shall, subject as aforesaid, be similarly construed.

(2)Subsection (1) shall not be taken as requiring any offer or invitation to be treated as made to the public if it can properly be regarded, in all the circumstances, as not being calculated to result, directly or indirectly, in the shares or debentures becoming available for subscription or purchase by persons other than those receiving the offer or invitation, or otherwise as being a domestic concern of the persons making and receiving it, and in particular a provision in a company's articles prohibiting invitations to the public to subscribe for shares or debentures shall not be taken as prohibiting the making to members or debenture holders of an invitation which can properly be so regarded.

(3)An offer of shares or debentures for subscription or sale to any person whose ordinary business is to buy or sell shares or debentures, whether as principal or agent, shall not be deemed an offer to the public for the purposes of this Part.

Issue of shares at premium and discount and redeemable shares (ss. 59-61)

59. Application of premiums received on issue of shares

(1)Where a company issues shares at a premium whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to an account, to be called "the share premium account", and the provisions of this Act relating to the reduction of the share capital of a company shall, except as provided in this section, apply as if the share premium account were paid up share capital of the company.

(2)The share premium account may, notwithstanding anything in subsection (1), be applied by the company in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares, in writing off—

(a)the preliminary expenses of the company; or

(b)the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company,

or in providing for the premium payable on redemption of any redeemable shares or of any debentures of the company.

(3)Where a company has before the appointed day issued any shares at a premium, this section shall apply as if the shares had been issued after the appointed day:Provided that any part of the premiums which has been so applied that it does not at the appointed day form an identifiable part of the company's reserves shall be disregarded in determining the sum to be included in the share premium account.

60. Power to issue shares at a discount

(1)Subject as provided in this section, it shall be lawful for a company to issue at a discount shares in the company of a class already issued:Provided that—

(a)the issue of the shares at a discount must be authorised by resolution passed in general meeting of the company, and must be sanctioned by the court;

(b)the resolution must specify the maximum rate of discount at which the shares are to be issued;

(c)not less than one year must, at the date of the issue, have elapsed since the date on which the company was entitled to commence business;

(d)the shares to be issued at a discount must be issued within one month after the date on which the issue is sanctioned by the court or within such extended time as the court may allow.

(2)Where a company has passed a resolution authorising the issue of shares at a discount, it may apply to the court for an order sanctioning the issue, and on any such application the court may make an order sanctioning the issue on such terms and conditions as it thinks fit.

(3)Every offer document relating to the issue of the shares must contain particulars of the discount allowed on the issue of the shares or of so much of that discount as has not been written off at the date of the issue of the offer document.

(4)If default is made in complying with this subsection, the company and every officer of the company who is in default shall be liable to a default fine.

61. Power to issue redeemable shares

(1)Subject to the provisions of this section, a company limited by shares may, if so authorised by its articles, issue shares which are, or at the option of the company are to be liable, to be redeemed:Provided that—

(a)no such shares shall be redeemed except out of profits of the company which would otherwise be available for dividend or out of the proceeds of a fresh issue of shares made for the purposes of the redemption;

(b)no such shares shall be redeemed unless they are fully paid;

(c)the premium, if any, payable on redemption, must have been provided for out of the profits of the company or out of the company's share premium account before the shares are redeemed;

(d)where any such shares are redeemed otherwise than out of the proceeds of a fresh issue, there shall out of profits which would otherwise have been available for dividend be transferred to a reserve fund to be called "the capital redemption reserve fund", a sum equal to the nominal amount of the shares redeemed, and the provisions of this Act relating to the reduction of the share capital of a company shall, except as provided in this section, apply as if the capital redemption reserve fund were paid up share capital of the company.

(2)Subject to the provisions of this section, the redemption of shares may be effected on such terms and in such manner as may be provided by the articles of the company.

(3)The redemption of shares under this section by a company shall not be taken as reducing the amount of the company's authorised share capital.

(4)Where in pursuance of this section a company has redeemed or is about to redeem any shares, it shall have power to issue shares up to the nominal amount of the shares redeemed or to be redeemed as if those shares had never been issued, and accordingly the share capital of the company shall not for the purpose of any enactments relating to tax on nominal capital be deemed to be increased by the issue of shares in pursuance of this subsection:Provided that, where new shares are issued before the redemption of old shares, the new shares shall not, so far as relates to tax on nominal capital, be deemed to have been issued in pursuance of this subsection unless the old shares are redeemed within one month after the issue of the new shares.

(5)The capital redemption reserve fund may, notwithstanding anything in this section, be applied by the company in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares.

Miscellaneous provisions as to share capital (ss. 62-67)

62. Power of company to arrange for different amounts being paid on shares

A company, if so authorised by its articles, may do any one or more of the following things—

(a)make arrangements on the issue of shares for a difference between the shareholders in the amounts and times of payment of calls on their shares;

(b)accept from any member the whole or a part of the amount remaining unpaid on any shares held by him, although no part of that amount has been called up;

(c)pay dividend in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others.

63. Reserve liability of limited company

A limited company may by special resolution determine that any portion of its share capital which has not been already called up shall not be capable of being called up except in the event and for the purposes of the company being wound up, and thereupon that portion of its share capital shall not be capable of being called up except in the event and for the purposes aforesaid.

64. Power of company to alter its share capital

(1)A company limited by shares or a company limited by guarantee and having a share capital, if so authorised by its articles, may alter the conditions of its memorandum as follows, that is to say, it may—

(a)increase its share capital by new shares of such amount as it thinks expedient;

(b)consolidate and divide all or any of its share capital into shares of larger amount than its existing shares;

(c)convert all or any of its paid up shares into stock, and reconvert that stock into paid up shares of any denomination;

(d)subdivide its shares, or any of them, into shares of smaller amount than is fixed by the memorandum, so, however, that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived;

(e)cancel shares which, at the date of the passing of the resolution in that behalf, have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled.

(2)A cancellation of shares in pursuance of this section shall not be deemed to be a reduction of share capital within the meaning of this Act.

65. Notice to Registrar of consolidation of share capital, conversion of shares into stock, etc.

(1)If a company having a share capital has—

(a)consolidated and divided its share capital into shares of larger amount than its existing shares; or

(b)converted any shares into stock; or

(c)re-converted stock into shares; or

(d)subdivided its shares or any of them; or

(e)redeemed any redeemable shares; or

(f)cancelled any shares, otherwise than in connection with a reduction of share capital under section 69,

it shall within thirty days after so doing give notice thereof to the Registrar specifying, as the case may be, the shares consolidated, divided, converted, subdivided, redeemed or cancelled, or the stock re-converted.

(2)If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a default fine.

66. Notice of increase of share capital

(1)Where a company having a share capital, whether its shares have or have not been converted into stock, has increased its share capital beyond the registered capital, it shall, within thirty days after the passing of the resolution authorising the increase, give to the Registrar notice of the increase.

(2)The notice to be given shall include such particulars as may be prescribed with respect to the classes of shares affected and the conditions subject to which the new shares have been or are to be issued, together with details of the amount of issued share capital of each class at the date of the notice, and there shall be forwarded to the Registrar together with the notice a printed copy of the resolution authorising the increase.

(3)If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a default fine.

67. Power of unlimited company to provide for reserve share capital on re-registration

An unlimited company having a share capital may, by its resolution for registration as a limited company in pursuance of this Act, do either or both of the following things, namely—

(a)increase the nominal amount of its share capital by increasing the nominal amount of each of its shares, but subject to the condition that no part of the increased capital shall be capable of being called up except in the event and for the purposes of the company being wound up;

(b)provide that a specified portion of its uncalled share capital shall not be capable of being called up except in the event and for the purposes of the company being wound up.

Reduction of share capital (ss. 68-72)

68. Disapplication re: open-ended investment companies

Sections 69, 70, 71 and 72 inclusive shall not apply to an reopen-ended investment company whose establishment has been duly authorised under the Capital Markets and Securities Act¹⁰.¹⁰Cap. 79

69. Special resolution for reduction of share capital

(1)A company limited by shares or a company limited by guarantee and having a share capital may, if so authorised by its articles and as provided herein, by special resolution reduce its share capital in any way, and in particular, may—

(a)extinguish or reduce the liability on any of its shares in respect of share capital not paid up; or

(b)either with or without extinguishing or reducing liability on any of its shares, cancel any paid up share capital which is lost or unrepresented by available assets; or

(c)either with or without extinguishing or reducing liability on any of its shares, pay off any paid up share capital which is in excess of the requirements of the company,

and may, if and so far as is necessary, alter its memorandum by reducing the amount of its share capital and of its shares accordingly.

(2)The notice given of the intention to propose the special resolution to reduce the company's share capital shall be accompanied by a directors' certificate of solvency given in accordance with section 70 and, where appropriate, the auditors' report thereon prepared in accordance with section 70.

(3)Subject to section 71, a special resolution passed reducing the share capital of a company shall not take effect until after the resolution has been filed with the Registrar and the resolution shall not, in any event, be filed with the Registrar until thirty five days from the date that it was passed.

(4)A special resolution reducing the share capital of a company shall be advertised in the Gazette and, in the case of a public company, one national newspaper, in each case within fourteen working days of the resolution having been passed. If the company fails to comply with this subsection, the directors shall be liable to a fine.[subsection (4) amended by section 24 of Act 3 of 2012]

70. Directors' certificate of solvency

(1)Where it is proposed to pass a resolution reducing the share capital of a company, the directors or a majority of them shall certify that they have made a full inquiry into the affairs of the company, and that, having so done, they have formed the opinion that the company will be able to pay its debts in full within twelve months from the date of the certificate or, if the company is wound up within that period, the date of the commencement of the winding up.

(2)If the company has auditors, the directors' certificate shall be accompanied by a report from the auditors to the effect that they have enquired into the state of the company's affairs and are not aware of anything to indicate that the directors' certificate of solvency is unreasonable.

(3)Any director of a company giving a certificate under this section without having reasonable grounds for his opinion shall be liable to imprisonment or to a fine or to both; and if the company is wound up in pursuance of a resolution passed within the period of twelve months after the giving of the certificate, but its debts are not paid or provided for in full within the period stated in the certificate, it shall be presumed unless the contrary is shown that the director did not have reasonable grounds for his opinion.

71. Application to court by creditors objecting to the reduction

(1)In the case of a reduction in the share capital of the company other than for the purpose specified in section 69(1)(b), any creditor of the company may apply to the court to object to the proposed reduction on the grounds that his position as creditor would be materially prejudiced by the reduction.

(2)An application under this section shall be made—

(a)within twenty eight days of the advertisement of the special resolution in the Gazette or, where appropriate, national newspaper; or

(b)in the case of a failure to advertise the special resolution as required by section 69(4), within such further period as the court may think just.

(3)On an application under this section the court may make an order prohibiting the reduction or confirming the reduction either wholly or in part and on such terms and conditions as it thinks fit.

(4)An alteration in the memorandum of a company made by virtue of an order under this section is of the same effect as if duly made by resolution, and this Act shall apply accordingly to the memorandum so altered.

72. Liability of members and directors in respect of reduced shares

(1)In the case of a reduction in capital that is not effected in accordance with sections 69, 70 and 71, including the case where a certificate is given by directors under section 70 where the directors did not have reasonable grounds to believe in its truth, any creditor of the company that would have been entitled to object to the proposed reduction under section 71 may apply to the court to object to the reduction on the grounds that his position as creditor has been materially prejudiced by the reduction.

(2)On an application under this section the court may make such order as it thinks fit, including an order that every member of the company at the date of the passing of the special resolution reducing the share capital having knowledge of the failure to comply with sections 69, 70 and 71 and, where appropriate, every director giving a directors' certificate under section 70, shall be liable to—

(a)contribute to the payment of the debt or claim of the creditor, save that in the case of a member this shall be in an amount not exceeding the amount which he would have been liable to contribute if the company had commenced to be wound up on the day before the date of the passing of the special resolution; or

(b)contribute to the repayment of the sum by which the share capital of the company was reduced as a result of the passing of the special resolution.

(3)Nothing in this section shall affect the rights of the contributories among themselves.

Variation of shareholders' rights (s. 73)

73. Rights of holders of special classes of shares

(1)If in the case of a company, the share capital of which is divided into different classes of shares, provision is made by the memorandum or articles for authorising the variation of the rights attached to any class of shares in the company, subject to the consent of any specified proportion of the holders of the issued shares of that class or the sanction of a resolution passed at a separate meeting of the holders of those shares, and in pursuance of the said provision the rights attached to any such class of shares are at any time varied, the holders of not less in the aggregate than ten percent of the issued shares of that class, being persons who did not consent to or vote in favour of the resolution for the variation, may apply to the court to have the variation cancelled, and, where any such application is made, the variation shall not have effect unless and until it is confirmed by the court.

(2)An application under this section shall be made by petition within thirty days after the date on which the consent was given or the resolution was passed, as the case may be, and may be made on behalf of the shareholders entitled to make the application by such one or more of their number as they may appoint in writing for the purpose.

(3)On any such application, the court, after hearing the applicant and any other persons who apply to the court to be heard and appear to the court to be interested in the application, may, if it is satisfied, having regard to all the circumstances of the case, that the variation would unfairly prejudice the shareholders of the class represented by the applicant, disallow the variation, and shall, if not so satisfied, confirm the variation.

(4)The decision of the court on any such application shall be final.

(5)The company shall within thirty days after the making of an order by the court on any such application forward a certified copy of the order to the Registrar, and, if default is made in complying with this provision, the company and every officer of the company who is in default shall be liable to a default fine.

(6)The expression "variation" in this section includes abrogation and the expression "varied" shall be construed accordingly.

Transfer of shares and debentures, evidence of title, etc. (ss. 74-87)

74. Nature of shares

The shares or other interest of any member in a company shall be movable property transferable in manner provided by the articles of the company.

75. Share depositories

(1)An approved stock exchange may establish a depository in which issued securities may be maintained provided that the Authority or other ruling body of such exchange shall prescribe rules relating to safe custody, transfer and reports to be filed with the Registrar relating to transactions concerning the deposited securities.

(2)The rules prescribed under subsection (1) shall be satisfactory to the Registrar.

(3)Transfer of securities deposited in a depository maintained by an approved stock exchange shall be effected in accordance with transfer procedures prescribed under the rules of such exchange.

76. Numbering of shares

Each share in a company having a share capital shall be distinguished by its appropriate number:Provided that, if at any time all the issued shares in a company, or all the issued shares therein of a particular class, are fully paid up and rank pari passu for all purposes, none of those shares need thereafter have a distinguishing number so long as it remains fully paid up and ranks pari passu for all purposes with shares of the same class for the time being issued and fully paid up.

77. Transfer not to be registered except on production of instrument of transfer

Notwithstanding anything in the articles of a company, it shall not be lawful for the company to register a transfer of shares in or debentures of the company unless a proper instrument of transfer duly stamped has been delivered to the company:Provided that nothing in this section shall prejudice any power of the company to register as shareholder or debenture holder any person to whom the right to any shares in or debentures of the company has been transmitted by operation of law.

78. Transfer by personal representative

A transfer of the share or other interest of a deceased member of a company made by his personal representative shall, although the personal representative is not himself a member of the company, be as valid as if he had been such a member at the time of the execution of the instrument of transfer.

79. Registration of transfer at request of transferor

On the application of the transferor of any share or interest in a company, the company shall enter in its register of members the name of the transferee in the same manner and subject to the same conditions as if the application for the entry were made by the transferee.

80. Notice of refusal to register transfer

(1)If a company refuses to register a transfer of any shares or debentures, the company shall, within sixty days after the date on which the transfer was lodged with the company, send to the transferee notice of the refusal.

(2)If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a default fine.

81. Certification of transfers

(1)The certification by a company of any instrument of transfer of shares in or debentures of the company shall be taken as a representation by the company to any person acting on the faith of the certification that there have been produced to the company such documents as on the face of them show a prima facie title to the shares or debentures in the transferor named in the instrument of transfer, but not as a representation that the transferor has any title to the shares or debentures.

(2)Where any person acts on the faith of false certification by a company made negligently, the company shall be under the same liability to him as if the certification had been made fraudulently.

(3)For the purposes of this section—

(a)an instrument of transfer shall be deemed to be certificated if it bears the words "certificate lodged" or words to the like effect;

(b)the certification of an instrument of transfer shall be deemed to be made by a company if—

(i)the person issuing the instrument is a person authorised to issue certificated instruments of transfer on the company's behalf; and

(ii)the certification is signed by a person authorised to certificate transfers on the company's behalf or by any officer or servant either of the company or of a body corporate so authorised;

(c)a certification shall be deemed to be signed by any person if—

(i)it purports to be authenticated by his signature or initials (whether handwritten or not); and

(ii)it is not shown that the signature or initials was or were placed there neither by himself nor by any person authorised to use the signature or initials for the purpose of certificating transfers on the company's behalf.

82. Duties of company with respect to issue of certificates

(1)Every company shall, within sixty days after the allotment of any of its shares, debentures or debenture stock and within two months after the date on which a transfer of any such shares, debentures or debenture stock is lodged with the company, complete and have ready for delivery the certificates of all shares, the debentures and the certificates of all debenture stock allotted or transferred, unless the conditions of issue of the shares, debentures or debenture stock otherwise provide. The expression "transfer" for the purpose of this subsection means a transfer duly stamped and otherwise valid, and does not include such a transfer as the company is for any reason entitled to refuse to register and does not register.

(2)If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a default fine.

(3)If any company on whom a notice has been served requiring the company to make good any default in complying with the provisions of subsection (1) fails to make good the default within ten days after the service of the notice, the court may, on the application of the person entitled to have the certificates or the debentures delivered to him, make an order directing the company and any officer of the company to make good the default within such time as may be specified in the order, and any such order may provide that all costs of and incidental to the application shall be borne by the company or by any officer of the company responsible for the default.

83. Evidence of title

(1)A certificate, under the common seal of the company, specifying any shares held by any member, shall be prima facie evidence of the title of the member to the shares.

(2)A depository receipt, issued by a depository established under section 75(1), shall be prima facie evidence of the title to the interest represented by the receipt.

84. Evidence of grant of probate

The production to a company of any document which is by law sufficient evidence of—

(a)probate of the will, or letters of administration of the estate, of a deceased person having been granted to some person; or

(b)the Administrator-General having undertaken administration of an estate under the Administrator-General (Powers and Functions) Act¹¹,¹¹Cap. 27

shall be accepted by the company, notwithstanding anything in its articles, as sufficient evidence of such grant or undertaking.

85. Issue and effect of share warrants to bearer

(1)A company limited by shares, if so authorised by its articles, may, with respect to any fully paid-up shares, issue under its common seal a warrant stating that the bearer of the warrant is entitled to the shares therein specified, and may provide, by coupons or otherwise, for the payment of the future dividends on the shares included in the warrant.

(2)Such a warrant is in this Act termed a "share warrant".

(3)A share warrant shall entitle the bearer thereof to the shares therein specified, and the shares may be transferred by delivery of the warrant.

86. Penalty for impersonation of share holder

If any person falsely and deceitfully impersonates any owner of any share or interest in any company, or of any share warrant or coupon, issued in pursuance of this Act, and thereby obtains or endeavours to obtain any such share or interest or share warrant or coupon, or receives or endeavours to receive any money due to any such owner, as if the offender were the true and lawful owner, he shall be guilty of an offence, and shall on conviction thereof be liable to imprisonment or to a fine or both.

87. Offences in connection with share warrants

(1)If any person—

(a)with intent to defraud, forges or alters, or offers, or disposes of, knowing the same to be forged or altered, any share warrant or coupon, or any document purporting to be a share warrant or coupon; or

(b)by means of any such forged or altered share warrant, coupon or document, demands or endeavours to obtain or receive any share or interest in any company under this Act, or to receive any dividend or money payable in respect thereof, knowing the warrant, coupon or document to be forged or altered,

he shall be guilty of an offence and shall on conviction thereof be liable to imprisonment or to a fine or both.

(2)If any person—

(a)engraves, prints or makes any share warrant or coupon purporting to be—

(i)a share warrant or coupon issued or made by any particular company in pursuance of this Act; or

(ii)a blank share warrant or coupon so issued or made; or

(iii)a part of such a share warrant or coupon; or

(b)uses any material for the making or printing of any such share warrant or coupon, or of any such blank share warrant or coupon, or any part thereof respectively; or

(c)knowingly has in his custody or possession any material or equipment for the making thereof,

he shall be guilty of an offence, and shall on conviction thereof be liable to imprisonment or to a fine or both.

Special Provisions as to Debentures (ss. 88-95)

88. Provisions as to register of debenture holders

(1)Every company which, after the appointed day, issues a series of debentures shall keep at the registered office of the company a register of holders of such debentures:Provided that—

(a)where the work of making up such register is done at some office of the company other than the registered office, such register may be kept at such office; and

(b)where the work of making up such register is by arrangement by the company undertaken by some person on behalf of the company, such register may be kept at the office of that person at which the work is done.

(2)Every company shall give notice to the Registrar of the place where the register is kept and of any change in that place:Provided that a company shall not be bound to give notice under this subsection if the register has, at all times since it came into existence, been kept at the registered office of the company.

89. Rights of debenture holders and shareholders to inspect register of debenture holders and to have copies of trust deed

(1)Every register of holders of debentures of a company shall, except when duly closed, be open during business hours to the inspection of the registered holder of any such debentures or any holder of shares in the company without fee, and of any other person on payment of a fee not exceeding the amount prescribed by the Minister in regulations.

(2)Every registered holder of debentures and every holder of shares in a company may require a copy of the register of the holders of debentures of the company or any part thereof on payment of a fee not exceeding the amount prescribed by the Minister in regulations.

(3)A copy of any trust deed for securing any issue of debentures shall be forwarded to every holder of any such debentures at his request on payment of a fee not exceeding the amount prescribed by the Minister in regulations.

(4)If inspection is refused, or a copy is refused or not forwarded, the company and every officer of the company who is in default shall be liable to a fine, and further shall be liable to a default fine.

(5)Where a company is in default, the court may by order compel an immediate inspection of the register or direct that the copies required shall be sent to the person requiring them.

(6)For the purposes of this section, a register shall be deemed to be duly closed if closed in accordance with provisions contained in the articles or in the debentures or, in the case of debenture stock, in the stock certificates, or in the trust deed or other document securing the debentures or debenture stock, during such period or periods, not exceeding in the whole thirty days in any year, as may be therein specified.

90. Liability of trustees for debenture holders

(1)Subject to the provisions of this section, any provision contained in a trust deed for securing an issue of debenture, or in any contract with the holders of debentures secured by a trust deed, shall be void in so far as it would have the effect of exempting a trustee thereof from or indemnifying him against liability for breach of trust where he fails to show the degree of care and diligence required of him as trustee, having regard to the provisions of the trust deed conferring on him any powers, authorities or discretions.

(2)Subsection (1) shall not invalidate—

(a)any release otherwise validly given in respect of anything done or omitted to be done by a trustee before the giving of the release; or

(b)any provision enabling such a release to be given—

(i)on the agreement thereto of a majority of not less than three-fourths in value of the debenture holders present and voting in person or, where proxies are permitted, by proxy at a meeting summoned for the purpose; and

(ii)either with respect to specific acts or omissions or on the trustee dying or ceasing to act.

(3)Subsection (1) shall not operate—

(a)to invalidate any provision in force at the appointed day so long as any person then entitled to the benefit of that provision or afterwards given the benefit thereof under subsection (4) remains a trustee of the deed in question; or

(b)to deprive any person of any exemption or right to be indemnified in respect of anything done or omitted to be done by him while any such provision was in force.

(4)While any trustee of a trust deed remains entitled to the benefit of a provision saved by subsection (3), the benefit of that provision may be given either—

(a)to all trustees of the deed, present and future; or

(b)to any named trustees or proposed trustees thereof,

by a resolution passed by a majority of not less than three-fourths in value of the debenture holders present in person or, where proxies are permitted, by proxy at a meeting summoned for the purpose in accordance with the provisions of the deed or, if the deed makes no provision for summoning meetings, a meeting summoned for the purpose in any manner approved by the court.

91. Perpetual debentures

A condition contained in any debentures or in any deed for securing any debentures, whether issued or executed before or after the appointed day, shall not be invalid by reason only that the debentures are thereby made irredeemable or redeemable only on the happening of a contingency, however remote, or on the expiration of a period, however long, any rule of equity to the contrary notwithstanding.

92. Power to re-issue redeemed debentures in certain cases

(1)Where either before or after the appointed day a company has redeemed any debentures previously issued, then—

(a)unless any provision to the contrary, whether express or implied, is contained in the articles or in any contract entered into by the company; or

(b)unless the company has, by passing a resolution to that effect or by some other act, manifested its intention that the debentures shall be cancelled,

the company shall have, and shall be deemed always to have had, power to re-issue the debentures, either by re-issuing the same debentures or by issuing other debentures in their place.

(2)Subject to the provisions of section 93 on a re-issue of redeemed debentures the person entitled to the debentures shall have, and shall be deemed always to have had, the same priorities as if the debentures had never been redeemed.

(3)Where a company has either before or after the appointed day deposited any of its debentures to secure advances from time to time on current account or otherwise, the debentures shall not be deemed to have been redeemed by reason only of the account of the company having ceased to be in debit whilst the debentures remained so deposited.

(4)The re-issue of a debenture or the issue of another debenture in its place under the power by this section given to, or deemed to have been possessed by, a company, whether the re-issue or issue was made before or after the appointed day, shall be treated as the issue of a new debenture for the purposes of stamp duty, but it shall not be so treated for the purposes of any provision limiting the amount or number of debentures to be issued:Provided that any person lending money on the security of a debenture re-issued under this section which appears to be duly stamped may give the debenture in evidence in any proceedings for enforcing his security without payment of the stamp duty or any penalty in respect thereof, unless he had notice or, but for his negligence, might have discovered, that the debenture was not duly stamped, but in any such case the company shall be liable to pay the proper stamp duty and penalty.

93. Saving, in case of re-issued debentures of rights of certain mortgagees

Where any debentures which were redeemed before 1st October 1932, have been re-issued after that day and before the appointed day or are re-issued after the appointed day, the re-issue of the debentures shall not prejudice and shall be deemed not to have prejudiced any right or priority which any person would have had under or by virtue of any mortgage or charge created before such date.

94. Specific performance of contracts to subscribe for debentures

A contract with a company to take up and pay for any debentures of the company may be enforced by an order for specific performance.

95. Payment of debts out of assets subject to floating charge

(1)The following applies in the case of a company where debentures of the company are secured by a charge which, as created, was a floating charge.

(2)Where either a receiver is appointed on behalf of the holders of any debentures of a company secured by a floating charge, or possession is taken by or on behalf of the holders of any of the debentures of any property comprised in or subject to the charge, and the company is not at that time in course of being wound up, the company's preferential debts shall be paid out of assets coming to the hands of the person taking possession in priority to any claims for principal or interest in respect of the debentures.

(3)"Preferential debts" means the categories of debts listed in section 367 and for the purposes of that section "the relevant date" is the date of possession being taken as above mentioned.

(4)Payments made under this section shall be recouped, as far as may be, out of the assets of the company available for payment of general creditors.

Part IV – Registration of charges (ss. 96-109)

Registration of charges with Registrar (ss. 96-106)

96. Registration of charges

(1)Subject to the provisions of this Part, every charge created by a company registered in Tanzania and being a charge to which this section applies shall, so far as any security on the company's property or undertaking is conferred thereby, be void against the liquidator or administrator and any creditor of the company, unless the prescribed particulars of the charge, together with the instrument, if any, by which the charge is created or evidenced are delivered to or received by the Registrar for registration in the manner required by this Part within forty-two days after the date of its creation.

(2)Subsection (1) is without prejudice to any contract or obligation for repayment of the money thereby secured, and when a charge becomes void under this section the money secured thereby shall immediately become payable.

97. Charges which have to be registered

(1)Section 96 applies to the following charges:

(a)A charge for the purpose of securing any issue of debentures;

(b)a charge on uncalled share capital of the company;

(c)a charge created or evidenced by an instrument which, if executed by an individual, would require registration as a bill of sale;

(d)a charge on land, wherever situated, or any interest therein;

(e)a charge on book debts of the company;

(f)a floating charge on the undertaking or property of the company;

(g)a charge on calls made but not paid;

(h)a charge on a ship, or aircraft, or any share in a ship;

(i)a charge on goodwill, or on any intellectual property.

(2)The Minister may by regulations amend subsection (1) to add any description of charge to, or remove any description of charge from, the charges which may be registered under section 96.

(3)Where a negotiable instrument has been given to secure the payment of any book debts of a company the deposit of the instrument for the purpose of securing an advance to the company shall not for the purposes of this section be treated as a charge on those book debts.

(4)The holding of debentures entitling the holder to a charge on land shall not for the purposes of this section be deemed to be an interest in land.

(5)In this Part—

(a)the expression "charge" includes mortgage;

(b)a charge shall be deemed to be created in the case of an instrument creating a charge on the date of the execution thereof by or on behalf of the company, and in the case of a charge created by deposit of title deeds on the date of the deposit thereof;

(c)the following are intellectual property—

(i)any patent, trademark, registered design, copyright or design right;

(ii)any licence under or in respect of such right.

98. Formalities of registration (debentures)

(1)Where a series of debentures containing, or giving by reference to another instrument, any charge to the benefit of which the debenture holders of that series are entitled pari passu is created by a company, it shall for the purposes of this section be sufficient if there are delivered to or received by the Registrar within forty-two days after the execution of the deed containing the charge or, if there is no such deed, after the execution of any debentures of the series, the following particulars—

(a)the total amount secured by the whole series;

(b)the date of the resolution authorising the issue of the series and the date of the covering deed, if any, by which the security is created or defined;

(c)a general description of the property charged; and

(d)the names of the trustees, if any, for the debenture holders,

together with the deed containing the charge or a copy thereof verified in the prescribed manner, or, if there is no such deed, one of the debentures of the series:Provided that, where more than one issue is made of debentures in the series, there shall be delivered to the Registrar within forty-two days of each issue for entry in the register particulars of the date and amount of each issue, but an omission to do this shall not affect the validity of the debentures issued.

(2)Where any commission, allowance of discount has been paid or made either directly or indirectly by a company to any person in consideration of his—

(a)subscribing or agreeing to subscribe, whether absolutely or conditionally, for any debentures of the company; or

(b)procuring or agreeing to procure subscriptions, whether absolute or conditional, for any such debentures, the particulars required to be sent for registration under this section shall include particulars as to the amount or rate percent of the commission, discount or allowance so paid or made, but omission to do this shall not affect the validity of the debentures issued:

Provided that the deposit of any debenture as security for any debt of the company shall not for the purposes of this subsection be treated as the issue of the debentures at a discount.

99. Charges created outside Tanzania

(1)In the case of a charge created out of Tanzania comprising property situated outside Tanzania, the delivery to and the receipt by the Registrar of a copy verified in the prescribed manner of the instrument by which the charge is created or evidenced, shall have the same effect for the purposes of this section as the delivery and receipt of the instrument itself, and forty-two days after the date on which the instrument or copy could, in due course of post, and if despatched with due diligence, have been received in Tanzania shall be substituted for forty-two days after the date of the creation of the charge, as the time within which the particulars and instrument or copy are to be delivered to the Registrar.

(2)The instrument creating or purporting to create the charge may be sent for registration under this section notwithstanding that further proceedings may be necessary to make the charge valid or effectual.

100. Duty of company to register charges created by company

(1)It shall be the duty of a company to deliver to the Registrar for registration the particulars of every charge created by the company and of the issue of debentures of a series, requiring registration under this Part, but registration of any such charge may be effected on the application of any person interested therein.

(2)Where registration is effected on the application of some person other than the company, that person shall be entitled to recover from the company the amount of any fees properly paid by him to the Registrar on registration.

(3)If a company fails for a period of forty-two days, or such extended period as the court may have ordered, to deliver to the Registrar for registration the particulars of any charge created by the company, or of the issue of debentures of a series requiring registration, then, unless the registration has been effected on the application of some other person, the company and every officer or other person who is a party to the default shall be liable to a default fine.

101. Duty of company to register charges existing on property acquired

(1)Where after the appointed day a company acquires any property which is subject to a charge of any such kind as would, if it had been created by the company after the acquisition of the property, have been required to be registered under this Part, the company shall cause the prescribed particulars of the charge, together with a copy (certified in the prescribed manner to be a correct copy) of the instrument, if any, by which the charge was created or is evidenced, to be delivered to the Registrar for registration within forty-two days after the date on which the acquisition is completed:Provided that, if the property is situated and the charge was created outside Tanzania, forty-two days after the date on which the copy of the instrument could in due course of post, and if despatched with due diligence, have been received in Tanzania, shall be substituted for forty-two days after the completion of the acquisition as the time within which the particulars and the copy of the instrument are to be delivered to the Registrar.

(2)If default is made in complying with this section the company and every officer of the company who is in default shall be liable to a default fine.

102. The companies charges register

(1)The Registrar shall keep for each company a register in such form as he thinks fit of charges on property of the company and such register shall consist of a file containing with respect to each charge the following particulars:

(a)in the case of a charge to the benefit of which the holders of a series of debentures are entitled, the particulars specified in section 98(1);

(b)in the case of any other charge—

(i)if it is a charge created by the company, the date of its creation, and if it is a charge which was existing on property acquired by the company, the date of the acquisition; and

(ii)the amount secured by the charge; and

(iii)short particulars of the property charged; and

(iv)the persons entitled to the charge.

(2)The register kept in pursuance of this section shall be open to any person and any person may require the Registrar to provide a certificate stating the date on which any specified particulars or other information relating to a charge were delivered to him.

(3)The Registrar shall give to the company a certificate of the registration of any charge registered in pursuance of and within any period allowed under this Part, stating the amount thereby secured, and the certificate shall be conclusive evidence that the requirements of this Part as to registration have been complied with.

103. Endorsement of certificate of registration on debentures

(1)The company shall cause a copy of every certificate of registration given under section 102(3) to be endorsed on every debenture or certificate of debenture stock which is issued by the company, and the payment of which is secured by the charge so registered:Provided that nothing in this subsection shall be construed as requiring a company to cause a certificate of registration of any charge so given to be endorsed on any debenture or certificate of debenture stock issued by the company before the charge was created.

(2)If a person knowingly and wilfully authorises or permits the delivery of any debenture or certificate of debenture stock which under the provisions of this section is required to have endorsed on it a copy of a certificate of registration without the copy being so endorsed upon it, he shall, without prejudice to any other liability, be liable to a fine.

104. Registration of satisfaction and release of property from charge

The Registrar on evidence being given to his satisfaction with respect to any registered charge—

(a)that the debt for which the charge was given has been paid or satisfied in whole or in part; or

(b)that part of the property or undertaking charged has been released from the charge or has ceased to form part of the company's property or undertaking,

may enter on the register a memorandum of satisfaction in whole or in part, or the fact that part of the property or undertaking has been released from the charge or has ceased to form part of the company's property or undertaking, as the case may be, and where he registers a memorandum of satisfaction in whole he shall, if required, furnish the company with a copy thereof.

105. Extension of time to register charges or rectification

The court, on being satisfied that the omission to register a charge within the time required by this Act or that the omission or misstatement of any particular with respect to any such charge or in a memorandum of satisfaction was accidental, or due to inadvertence or to some other sufficient cause, or is not of a nature to prejudice the position of creditors or shareholders of the company, or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any person interested, and on such terms and conditions as seem to the court just and expedient, order that the time for registration shall be extended, or, as the case may be, that the omission or misstatement shall be rectified.

106. Registration of enforcement of security

(1)If a person obtains an order for the appointment of a receiver or manager of the property of a company, or appoints such a receiver or manager under any powers contained in any instrument, he shall, within seven days from the date of the order or of the appointment under the said powers, give notice of the fact to the Registrar, and the Registrar shall enter the fact in the register of charges.

(2)Where any person appointed receiver or manager of the property of a company under the powers contained in any instrument ceases to act as such receiver or manager, he shall, within seven days of so ceasing, give the Registrar notice to that effect, and the Registrar shall enter the fact in the register of charges.

(3)If any person makes default in complying with the requirements of this section, he shall be liable to a fine for every day during which the default continues.

Provisions as to company's register of charges and as to copies of instruments creating charges (ss. 107-109)

107. Copies of instruments creating charges to be kept by company

(1)Every company shall cause a copy of every instrument creating any charge requiring registration under this Part to be kept at the registered office of the company.

(2)In the case of a series of uniform debentures, a copy of one debenture of the series shall be sufficient.

108. Company's register of charges

(1)Every limited company shall keep at its registered office a register of charges and enter therein all charges specifically affecting property of the company and all floating charges on the undertaking or any property of the company, giving in each case a short description of the property charged, the amount of the charge, and, except in the case of securities to bearer, the names of the persons entitled thereto.

(2)If an officer of the company knowingly and wilfully authorises or permits the omission of any entry required to be made in pursuant of this section, he shall be liable to a fine.

109. Right to inspect instruments creating charges

(1)The copies of instruments creating any charge requiring registration under this Part with the Registrar, and the register of charges kept in pursuance of section 108, shall be open during business hours to the inspection of any creditor or member of the company without fee, and the register of charges shall also be open to the inspection of any other person on payment of such fee as may be prescribed by the Minister in regulations.

(2)If inspection of the said copies or register is refused—

(a)any officer of the company refusing inspection, and every director and manager of the company authorising or knowingly and wilfully permitting the refusal, shall be liable to a fine and a further fine for every day during which the refusal continues; and

(b)the court may by order compel an immediate inspection of the copies or register.

Part V – Management and administration (ss. 110-234)

Chapter I
Registered office and name (ss. 110-114)

110. Registered office of company

(1)A company shall, at all times have a registered office to which all communications and notices may be addressed.

(2)If default is made in complying with this section the company and every officer of the company who is in default shall be liable to a default fine.

111. Notification of situation of registered office and of change therein

(1)On incorporation, the situation of the company's registered office is that specified in the statement sent to the Registrar under section 14.

(2)The company may change the situation of its registered office from time to time by giving notice in the prescribed form to the Registrar and such notice shall be given within fourteen days after the date of the change, and the Registrar shall record the same.

(3)The inclusion in the annual return of a company of a statement as to the situation of its registered office shall not be taken to satisfy the obligations imposed by this section.

(4)If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a default fine.

112. Publication of name by company and form of seal

(1)Every company shall—

(a)paint or affix, and keep painted or affixed, its name on the outside of every office or place in which its business is carried on, in a conspicuous position, in easily legible letters;

(b)in the case that it has a common seal, have its name engraved in legible letters on its seal;

(c)have its name and its registered office mentioned in legible letters in all business letters of the company and in all notices and other official publications of the company, and in all bills of exchange, promissory notes, endorsements, cheques and orders for money or goods purporting to be signed by or on behalf of the company, and in all invoices, receipts and letters of credit of the company.

(2)If a company does not paint or affix its name in manner directed by this section, the company and every officer of the company who is in default shall be liable to a fine and if a company does not keep its name painted or affixed in manner so directed, the company and every officer of the company who is in default shall be liable to a default fine.

(3)If a company fails to comply with subsections (1)(b) or (1)(c), the company shall be liable to a fine.

(4)If an officer of a company or any person on its behalf—

(a)uses or authorises the use of any seal purporting to be a seal of the company without its name as required by subsection (1); or

(b)issues or authorises the issue of any business letter of the company or any notice or other official publication of the company, or signs or authorises to be signed on behalf of the company any bill of exchange, promissory note, endorsement, cheque or order for money or goods wherein its name and registered office are not mentioned in manner aforesaid; or

(c)issues or authorises the issue of any invoice, receipt or letter of credit of the company wherein its name and registered office is not mentioned in manner aforesaid,

he shall be liable to a fine and shall further be personally liable to the holder of the bill of exchange, promissory note, cheque or order for money or goods for the amount thereof unless it is duly paid by the company.

Statement of amount of paid-up capital (s. 113)

113. Statement of amount of capital subscribed and amount paid up

(1)Where any notice, advertisement or other official publication of a company contains a statement of the amount of the authorised capital of the company, such notice, advertisement, or other official publication shall also contain a statement in an equally prominent position and in equally conspicuous characters of the amount of the capital which has been subscribed and the amount paid up.

(2)Any company which makes default in complying with the requirements of this section and every officer who is in default shall be liable to a fine.

Restriction on commencement of business (s. 114)

114. Restrictions on commencement of business

(1)Where a public company having a share capital has issued an offer document inviting the public to subscribe for its shares, the company shall not commence any business or exercise any borrowing powers unless it has complied with the requirements as included from time to time in regulations made by the Minister for the time being responsible for finance, or the Capital Markets and Securities Authority or such other authority as may be designated for the purpose.

(2)If any public company commences business or exercises borrowing powers in contravention of this section, every person who is responsible for the contravention shall, without prejudice to any other liability, be liable to a default fine.

Chapter II
Register of members (ss. 115-127)

115. Register of members

(1)Every company shall keep a register of its members and enter in it the following particulars—

(a)the names and addresses of the members, and in the case of a company having a share capital a statement of—

(i)the shares held by each member, distinguishing each share by its number (so long as the share has a number), and where appropriate by its class; and

(ii)the amount paid or agreed to be considered as paid on the shares of each member;

(b)the date at which each person was entered in the register as a member;

(c)the date at which any person ceased to be a member:Provided that where the company has converted any of its shares into stock, the register shall show the amount of stock held by each member instead of the amount of shares and the particulars relating to shares specified in paragraph (a) of this subsection.

(2)The register of members shall be kept at the registered office of the company:Provided that—

(a)if the work of making it up is done at another office of the company, it may be kept at that other office; and

(b)if the company arranges with some other person for the making up of the register to be undertaken on behalf of the company by that other person, it may be kept at the office of that other person at which the work is done,

although it shall not be kept at a place outside Tanzania.

(3)Where the register of members is not kept at the registered office, every company shall send notice to the Registrar of the place where it is kept and of any change in that place.

(4)Where a company makes default in complying with subsection (1) or makes default for fourteen days in complying with subsection (3), the company and every officer of the company who is in default shall be liable to a default fine.

116. Index of members

(1)Every company having more than fifty members shall, unless the register of members is in such a form as to constitute in itself an index, keep an index of the names of the members of the company and shall, within fourteen days after the date on which any alteration is made in the register of members, make any necessary alteration in the index.

(2)The index shall in respect of each member contain a sufficient indication to enable the account of that member in the register to be readily found.

(3)The index shall be at all times kept at the same place as the register of members.

(4)If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a default fine.

117. Entries in register in relation to share warrants

(1)On the issue of a share warrant the company shall strike out of its register of members the name of the member then entered therein as holding the shares specified in the warrant as if he had ceased to be a member, and shall enter in the register the following particulars, namely—

(a)the fact of the issue of the warrant;

(b)a statement of the shares included in the warrant, distinguishing each share by its number; and

(c)the date of the issue of the warrant.

(2)The bearer of a share warrant shall, subject to the articles of the company, be entitled, on surrendering it for cancellation, to have his name entered as a member in the register of members.

(3)The company shall be responsible for any loss incurred by any person by reason of the company entering in the register the name of a bearer of a share warrant in respect of the shares therein specified without the warrant being surrendered and cancelled.

(4)Until the warrant is surrendered, the particulars specified in subsection (1) shall be deemed to be the particulars required by this Act to be entered in the register of members, and, on the surrender, the date of the surrender must be entered.

(5)Subject to the provisions of this Act, the bearer of a share warrant may, if the articles of the company so provide, be deemed to be a member of the company within the meaning of this Act, either to the full extent or for any purposes defined in the articles.

118. Inspection of register and index

(1)Except when the register of members is closed under the provisions of this Act, the register, and index of the names of the members of a company shall during business hours be open to the inspection of any member without charge and of any other person on payment of such fee as the Minister may prescribe in regulations.

(2)Any member or other person may require a copy of the register, or of any part thereof, on payment of such fee as the Minister may prescribe in regulations, and the company shall cause any copy so required by any person to be sent to that person within a period of ten days commencing on the day next after the day on which the requirement is received by the company.

(3)If any inspection required under this section is refused or if any copy required under this section is not sent within the proper period, the company and every officer of the company who is in default shall be liable in respect of each offence to a fine.

(4)In the case of any such refusal or default, the court may by order compel an immediate inspection of the register and index or direct that the copies required shall be sent to the person requiring them.

119. Non-compliance with requirements as to register owing to agent's default

Where, by virtue of section 115(2)(b), the register of members is kept at the office of some person other than the company, and by reason of any default of that person the company fails to comply with section 115(3), section 116(3), or section 118 or with any requirements of this Act as to the production of the register, that other person shall be liable to the same penalties as if he were an officer of the company who was in default, and the power of the court under section 118(4) shall extend to the making of orders against that other person and his officers and servants.

120. Power to close register

A company may, on giving notice by advertisement in a newspaper circulating in the district of Tanzania in which the registered office of the company is situated, close the register of members for any time or times not exceeding in the whole thirty days in each year.

121. Power of court to rectify register

(1)If—

(a)the name of any person is, without sufficient cause, entered in or omitted from the register of members of a company; or

(b)default is made or unnecessary delay takes place in entering on the register the fact of any person having ceased to be member,

the person aggrieved, or any member of the company, or the company, may apply to the court for rectification of the register.

(2)The court may either refuse the application or may order rectification of the register and payment by the company of any damages sustained by any party aggrieved.

(3)The court may decide any question relating to the title of any person who is a party to the application to have his name entered in or omitted from the register, whether the question arises between members or alleged members, or between members or alleged members on the one hand and the company on the other hand, and generally may decide any question necessary or expedient to be decided for rectification of the register.

(4)In the case of a company required by this Act to send a list of its members to the Registrar, the court, when making an order for rectification of the register, shall by its order direct notice of the rectification to be given to the Registrar.

122. Trusts not to be entered on register

No notice of any trust, expressed, implied or constructive, shall be entered on the register, or be receivable by the Registrar.

123. Register to be evidence

The register of members shall be prima facie evidence of any matters by this Act directed or authorised to be inserted therein.

Branch register (ss. 124-127)

124. Power to keep branch register

(1)A company having a share capital may, if so authorised by its articles, cause to be kept in any country outside Tanzania a branch register of members resident in that country (in this Act called a "branch register").

(2)The company shall give to the Registrar notice of the situation of the office where any branch register is kept, and of any change in its situation, and if it is discontinued, of its discontinuance, and any such notice shall be given within thirty days of the opening of the office or of the change or discontinuance, as the case may be.

(3)If default is made in complying with subsection (2) the company and every officer of the company who is in default shall be liable to a default fine.

125. Regulations as to branch register

(1)A branch register shall be deemed to be part of the company's register of members (in this section called "the principal register").

(2)A branch register shall be kept in the same manner in which the principal register is required to be kept by this Act, except that the advertisement before closing the register shall be inserted in some newspaper circulating in the district where the branch register is kept.

(3)The company shall—

(a)transmit to its registered office a copy of every entry in its branch register as soon as may be after the entry is made; and

(b)cause to be kept at the place where the company's principal register is kept a duplicate of its branch register duly entered up from time to time, and

every such duplicate shall for all the purposes of this Act be deemed to be a part of the principal register.

(4)Subject to the provisions of this section with respect to the duplicate register, the shares registered in a branch register shall be distinguished from the shares registered in the principal register, and no transaction with respect to any shares registered in a branch register shall, during the continuance of that registration, be registered in any other register.

(5)A company may discontinue to keep a branch register, and thereupon all entries in that register shall be transferred to the principal register.

(6)Subject to the provisions of this Act, any company may, by its articles, make such provisions as it may think fit respecting the keeping of branch registers.

(7)If default is made in complying with subsection (3), the company and every officer of the company who is in default shall be liable to a fine; and where, by virtue of section 115(2)(b), the principal register is kept at the office of some person other than the company and by reason of any default of that person the company fails to comply subsection (3)(b) of this section, he shall be liable to the same penalty as if he were an officer of the company who was in default.

126. Stamp duties in case of shares registered in branch registers

An instrument of transfer of a share registered in a branch register, shall be deemed to be a transfer of property situated out of Tanzania, and, unless executed in any part of Tanzania, shall be exempt from stamp duty chargeable in Tanzania.

127. Branch registers of companies kept in Tanzania

If, by virtue of the law in force in any country outside Tanzania, companies incorporated under that law have the power to keep in Tanzania branch registers of their members resident in Tanzania, the Minister may by order published in the Gazette direct that section 115(2) except the proviso thereto and sections 118 and 121 shall, subject to any modifications and adaptations specified in the order, apply to and in relation to any such branch registers kept in Tanzania as they apply to and in relation to the registers of companies within the meaning of this Act.

Chapter III
Annual return (ss. 128-132)

128. Duty to deliver annual returns

(1)Every company shall deliver to the Registrar, successive annual returns each of which is made up to a date not later than the "return date", that is—

(a)the anniversary of the company's incorporation; or

(b)if the company's last return delivered in accordance with this Chapter was made up to a different date, the anniversary of that date.

(2)Each return shall—

(a)be in the prescribed form;

(b)contain the information required under the provisions of this Chapter;

(c)be signed by a Director or the Secretary of the company.

(3)If a company fails to deliver an annual return in accordance with this Chapter within twenty eight days of the return date, the company and every officer of the company who is in default shall be liable to a fine and, in the case of a continued failure to deliver an annual return, to a default fine. For the purpose of this subsection, the expression "officer" shall include any person in accordance with whose directions or instructions the directors of the company are accustomed to act.

129. Contents of annual return: general

(1)Every annual return shall state the date to which it is made up and shall contain the following information—

(a)the address of the company's registered office;

(b)the type of company whether it is (public/private/open-ended investment company) and its principal business activities;

(c)the name and address of the company secretary;

(d)the name and address of every director of the company; and

(i)in the case of each individual director, his nationality, date of birth, business occupation and such particulars of other directorships as are required to be contained in the company's register of directors;

(ii)in the case of a corporate director, such particulars of other directorships as would be required to be kept in the company's register in the case of an individual;

(e)if the register of members is not kept at the company's registered office, the address of the place where it is kept;

(f)if any register of debenture holders (or a duplicate of any such register or part of it) is not kept at the company's registered office, the address of the place where it is kept.

130. Contents of annual return: share capital and shareholders

(1)The annual return of a company having a share capital shall contain the information specified under subsections (2), (3), (4) and (5) with respect to its share capital and members.

(2)The annual return shall state the total number of issued shares of the company at the date to which the return is made up and the aggregate nominal value of those shares.

(3)The annual return shall state with respect to each class of shares in the company—

(a)the nature of the class; and

(b)the total number and aggregate nominal value of issued shares of that class at the date to which the return is made up.

(4)The annual return shall contain a list of the names and addresses of every person who—

(a)is a member of the company on the date to which the return is made up; or

(b)has ceased to be a member of the company since the date to which the last return was made up (or, in the case of the first return, since the incorporation of the company),

and if the names are not arranged in alphabetical order the return shall have annexed to it an index sufficient to enable the name of any person in the list to be easily found.

(5)The annual return shall also state—

(a)the number of shares of each class held by each member of the company at the date to which the return is made up; and

(b)the number of shares of each class transferred since the date to which the last return was made up (or, in the case of the first return, since the incorporation of the company) by each member or person who has ceased to be a member, and the dates of registration of the transfers.

(6)The annual return may, if either of the two immediately preceding returns has given the full particulars required by subsections (4) and (5), give only such particulars as relate to persons ceasing to be or becoming members since the date of the last return and to shares transferred since that date.

(7)Subsections (4) and (5) do not require the inclusion of particulars entered in a branch register if copies of those entries have not been received at the company's registered office by the date to which the return is made up and such particulars shall be included in the company's next annual return after they are received.

(8)Where the company has converted any of its shares into stock, the return shall give the corresponding information in relation to that stock, stating the amount of stock instead of the number or nominal value of shares.

131. Annual return to be made by company not having a share capital

Every company not having a share capital shall make an annual return containing the information specified in section 129 and there shall be annexed to the return a statement containing particulars of the total amount of the indebtedness of the company in respect of all mortgages and charges which are required to be registered with the Registrar under this Act, or which would have been required so to be registered if created after 1st December 1920.

132. Accounts and other documents to be annexed to annual return

(1)There shall be annexed to the annual return—

(a)in the case of all companies other than private companies exempt from the obligation to appoint auditors under section 171 and unlimited companies exempt from the obligation to prepare accounts under section 169—

(i)a copy, certified both by a Director and by the Secretary of the company to be a true copy, of the accounts laid before the company in a general meeting during the period to which the return relates (including every document required by law to be annexed to the accounts); and

(ii)a copy, certified as above, of the report of the auditors on, and of the report of the directors accompanying, each such balance sheet; and where any such accounts or document required by law to be annexed thereto is in a foreign language, there shall be annexed thereto a certified translation;

(iii)if any such accounts or document required by law to be annexed thereto did not comply with the requirements of the law as in force at the date of the audit with respect to the form of accounts or documents aforesaid, as the case may be, there shall be made such additions to and corrections in the copy as would have been required to be made in the accounts or document in order to make the same comply with the said requirements, and the fact that the copy has been so amended shall be stated thereon;

(b)in the case of a private company, a certificate signed by a Director of the company that the company has not, since the date of the last return or, in the case of a first return, since the date of the incorporation of the company, issued any invitation to the public to subscribe for any shares or debentures of the company;

(c)in the case of a private company exempt from the obligation to appoint an auditor under section 171, a certificate signed by a Director of the company that the qualifying conditions as to turnover and gross assets as provided for in that section have been satisfied—

(i)in the case of a company's first accounting period, in that period; and

(ii)in any other case, in the last completed accounting period and the preceding period.

(2)If a company fails to comply with this section, the company and every officer of the company who is in default shall be liable to a fine.

(3)If any certificate required to be given under this section is false in any particular, the company and every officer of the company who is in default shall be liable to a fine.

(4)For the purposes of this subsection, the expression "officer" shall include any person in accordance with whose directions or instructions the directors of the company are accustomed to act.

Chapter IV
Meetings and resolutions (ss. 133-150)

Meetings (ss. 133-150)

133. Annual general meeting

(1)Every company shall in each year hold a general meeting as its annual general meeting in addition to any other meetings in that year, and shall specify the meeting as such in the notices calling it. At the annual general meeting, the company shall, wherever practicable and subject to the provisions of this Act, transact the following business—

(a)to have laid before the members the annual accounts;

(b)to have laid before the members the directors' report;

(c)to have laid before the members the auditors' report;

(d)the appointment of auditors for the period up till the next general meeting at which accounts are laid;

(e)the re-election of any directors retiring and seeking re-election in accordance with any requirement in the company's articles of association;

(f)the election or confirmation of appointment of any directors in accordance with any requirement in the company's articles of association.

(2)So long as a company holds its first annual general meeting within eighteen months of its incorporation, it need not hold it in the year of its incorporation or in the following year.

(3)Not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next.

(4)If default is made in holding a meeting of the company in accordance with subsection (3), the Minister may, on the application of any member of the company, call or direct the calling of a general meeting of the company and give such ancillary or consequential directions as the Registrar thinks expedient, including directions modifying or supplementing, in relation to the calling, holding and conducting of the meeting, the operation of the company's articles; and the directions that may be given under this subsection including a direction that one member of the company present in person or by proxy shall be deemed to constitute a meeting.

(5)A general meeting held in pursuance of subsection (4) shall, subject to any directions of the Registrar, be deemed to be an annual general meeting of the company; but, where a meeting so held is not held in the year in which the default in holding the company's annual general meeting occurred, the meeting so held shall not be treated as the annual general meeting for the year in which it is held unless at that meeting the company resolves that it shall be so treated.

(6)Where a company resolves that a meeting shall be treated as the company's annual general meeting, a copy of the resolution shall, within fourteen days after the passing thereof, be forwarded to the Registrar for registration.

(7)If default is made in holding a meeting of the company in accordance with subsection (1), or in complying with any directions of the Registrar under subsection (4), the company and every officer of the company who is in default shall be liable to a fine and if default is made in complying with subsection (6), the company and every officer of the company who is in default shall be liable to a default fine.

134. Extraordinary general meeting on members' requisition

(1)The directors of a company, notwithstanding anything in its articles, shall, on a members' requisition, immediately proceed duly to convene an extraordinary general meeting of the company.

(2)A members' requisition is a requisition of—

(a)members of the company holding at the date of the deposit of the requisition not less than one-tenth of such of the paid-up capital of the company as at the date of the deposit carries the right of voting at general meetings of the company; or

(b)in the case of a company not having a share capital, members of the company representing not less than one-tenth of the total voting rights of all the members having at the said date a right to vote at general meetings of the company.

Companies Act, 2002

Chapter 212

Collections

Related documents

Companies Act, 2002

Chapter 212

Part I – Preliminary provisions (ss. 1-2)

1. Short title and commencement

2. Interpretation

Part II – Incorporation of companies and matters incidental thereto (ss. 3-44)

Chapter IThe company's memorandum and articles (ss. 3-29)

Memorandum of Association (ss. 3-8)

3. Mode of forming incorporated company

4. Requirements with respect to memorandum

5. Signature of memorandum

6. Restriction on alteration of memorandum

7. Statement of company's objects: general commercial company

8. Mode in which and extent to which memorandum may be altered

Memorandum and Articles of Association (ss. 9-23)

9. Articles prescribing regulations for companies

10. Regulations required in case of unlimited company or company limited by guarantee

11. Adoption and application of Table A

12. Statutory forms of memorandum and articles

13. Alteration of articles

14. Registration of memorandum and articles

15. Effect of registration

16. Conclusiveness of certificate of incorporation

17. Registration of unlimited company as limited

18. Effect of memorandum and articles

19. Memorandum and articles of a company limited by guarantee

20. Effect of alteration on company's members

21. Power to alter conditions in memorandum which could have been contained in articles

22. Copies of memorandum and articles to be given to members

23. Issued copies of memorandum to embody alterations

Membership of Company (ss. 24-26)

24. Definition of member

25. Membership of holding company

26. Members severally liable for debts where business carried on with fewer than two members

26A. Single shareholder

Private companies (ss. 27-29)

27. Meaning of "private company"

28. Consequences of default in complying with conditions constituting a private company

29. Company ceasing to be private company

Chapter IICompany names (ss. 30-34)

30. Reservation of name and prohibition of undesirable name

31. Change of name

32. Power to dispense with "Limited"

33. Power to require company to abandon misleading name

34. Penalty for improper use of "limited" or "public limited company" etc.

Chapter IIIA company's capacity; formalities of carrying on business (ss. 35-44)

35. A company's capacity not limited by its memorandum

36. Power of directors to bind the company

37. No duty to enquire as to capacity of company or authority of Directors

38. Company contracts

39. Execution of documents

40. Pre-incorporation contracts, deeds and obligations

41. Bills of exchange and promissory notes

42. Execution of deeds abroad

43. Power for company to have official seal for use abroad

44. Authentication of documents

Part III – Share capital and debentures (ss. 45-95)

45. Public and private companies

Offer documents (ss. 46-53)

46. Dating of offer document

47. Matters to be stated and reports to be set out in offer document

48. Expert's consent to issue of offer document containing statement by him

49. Registration of offer document

50. Civil liability for misstatements in offer document

51. Criminal liability for misstatements in offer document

52. Document containing offer of shares or debentures for sale to be deemed offer document

53. Interpretation of provisions relating to offer documents

Allotment (ss. 54-55)

54. Requirements as to allotments

55. Return as to allotments

Commissions and discounts, financial assistance (ss. 56-57)

56. Power to pay certain commissions, and prohibitions of payment of all other commissions, discounts, etc.

57. Prohibition of provision of financial assistance by company for purchase or subscription for its own, or its holding company's shares

Construction of references to offering shares or debentures to the public (s. 58)

58. Construction of references to offering shares or debentures to the public

Issue of shares at premium and discount and redeemable shares (ss. 59-61)

Chapter I
The company's memorandum and articles (ss. 3-29)

Chapter II
Company names (ss. 30-34)

Chapter III
A company's capacity; formalities of carrying on business (ss. 35-44)

Chapter I
Registered office and name (ss. 110-114)

Chapter II
Register of members (ss. 115-127)