10 Reasons why the Article 400A of the Companies Act of Tanzania ( as amended by parliament ) will discourage Foreign Direct Investment in Tanzania

Zitto

MP Kigoma Urban
Mar 2, 2007
1,503
2,000
10 Reasons why the Proposed Article 400A of the Companies Act of Tanzania will discourage foreign direct investment in Tanzania

Amne Suedi Kagasheki – International Lawyer. Founder Shikana Law Group.

1. Striking off a company is normally reserved for cases whereby a company is not operational or carrying on a business. Article 400A proposes that a company that is operational and conducting a business may be struck off.

2. The Registrar of Companies’ powers to strike off any company can be exercised not based on a definitive and conclusive evidence, judgment or conviction from court of law, but on a belief that may constitute a reasonable ground.

3. One of the reasons for a company to be struck off is if the Company is “fraudulently registered” (Section 400A (1) (a)) and this goes against the principle of the “conclusiveness of certificate of incorporation” provided and guaranteed under section 16 (1) of the Companies Act which states that a certificate of incorporation given by the Registrar is conclusive evidence that all requirements of this Act in respect of registration have been complied to. Essentially, this weakens the value of a certificate of incorporation under the Companies Act of Tanzania.

4. Section 400A (1) (c) proposes that a company can be struck off because of “misrepresentation” by the registered company directly contradicts section 472 of the Companies Act that provides that false statements and misrepresentation may constitute an offence which is punishable by conviction or a fine. It does not provide that a company can be struck off due to the extremity of such a procedure and its consequences.

5. Section 400A (1) (b) undermines the authority of the Financial Intelligence Unit established by the Anti-Money Laundering Act of Tanzania and puts in danger any investigation or criminal proceeding taking place with regards to offences under this Act. It also denies the right to be heard and to have fair trial since the Registrar in striking off the Company based on a belief has already condemned.

6. The shareholders and directors being prohibited to enter the country as a ground for the Registrar to strike off a company denies the freedom of shareholders to appoint other directors so as the management of the company can continue or to exercise the shareholders’ right of constituting a proxy so that his or her rights are still exercised. This is a direct interference in the affairs of a private company.

7. In striking off a Company, the Registrar has no obligation beforehand to notify creditors that may have claims over the Company and creditors will not have any right to object until after the Company is struck off where a long process of restoration is to commence should creditors wish to enforce their creditors’ rights. Where restoration is granted, the Company will have to pay interest it accumulated from the date the Company was struck off irrespective of whether or not there was cause since the financial instrument will be valid despite the Company being struck off (section 400A (6)).

8. Once a company is published in the Gazette as being struck off, any other person / company can register a company using the same name as the company struck off and this mere fact negates the right of the company that has been struck off to ever be considered for registration again, even where the court may find cause for restoration and another person/ company can benefit from the brand equity built by the Company that is struck off “just like that”.

9. Section 400A undermines the provisions in the Companies Act for winding up a company which are there to protect creditors, partners and shareholders. This provision seeks to punish which is contrary to the spirit of the Companies Act and general principle of good faith in conducting business.

10. Section 400A gives Registrar of Companies unprecedented powers “to undo” what potentially has taken investors years “to do” and potentially if exercised goes against the principle of sanctity of contract as enshrined in the Law of Contract Act of Tanzania.
 

NewOrder

JF-Expert Member
Apr 11, 2011
928
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Instead of building strong institutions, we are building strong appointed executives! Mistake!

Utasikia “waziri akiona inafaa” na waziri huyo huyo hawi checked kwa maamuzi yake. Mambo kama haya yangeamuliwa na mahakama za kibiashara ambapo waziri na kampuni husika wanapewa haki sawa mbele ya sheria. Tuna nafasi ya kujifunza kutoka ktk mataifa yaliyoendelea (tunayotegemea yaje kuwekeza hapa nchini) lakini tuko wazito kujifunza.
 

Kilatha

JF-Expert Member
Nov 28, 2018
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This a bad a law especially point 6 and 7.

Surely a company also has an article of association which articulates how the company would be run with shareholders giving the powers of decision to the management. With that reasoning you can’t mix shareholders with management in respect to public listed companies, private listed and co-opreations.

Point 7 is even more absurd you can’t just decide to shut down. Creditors won’t lend to a company in the first place if they knew it will be stroked down by government decidion any moment.

There are assemesment before deciding to lend none more crucial than the liquidity of the company and its overall financial performance especially with long term debentures/loans sasa tena ukisema kampuni inaweza futwa na mpuuzi that is not assuring.

This is just a very bad law in the business world which adds the aspect of uncertainty to everyone hivi ni akina nani wanatunga hizi sheria.
 

darcity

JF-Expert Member
Jul 20, 2009
4,892
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sheria nyingi zinazotungwa awamu hii zinaonekana si rafiki kwa wahusika wa sekta husika, kuna haja setikali na wabunge waangalie maslahi ya pande zote. (Watawaka na watawaliwa) Maana ni kama vile watawala wanaangalua maslahi ya utawala wao.
 

jamvimoto

JF-Expert Member
Jul 28, 2015
693
500
Hivi hawa ccm wamefokia upumbavu wa kiasi hicho wanamuacha huyu mtu anatamba na ujinga kiasi.kwa uharibifu huu unafikiri wao wataishi mwezini
 

Cosmo 1

JF-Expert Member
Nov 9, 2010
460
500
Tatizo ni kwamba wakati mwingi wanapoleta miswaada ya marekebisho muda huwa ni mchache sana kwa wabunge ama wadau kupitia kifungu kimoja hadi kingine ya kuangalia sheria zingine zinazokinzana na hiyo sheria ya kufanyiwa marekebisho, hivyo basi hii si aibu tu kwa bunge kupokea na kushindwa hata kushauri muda muafaka wa kupitia hivyo vifungu taratibu, ni aibu pia kwa wale wanopeleka muswada huo pia.
Kwa maoni yangu hata huu pia utafanyiwa marekebisho ndani ya miaka miwili.
 

Kilatha

JF-Expert Member
Nov 28, 2018
1,969
2,000
Nionacho ni kuwa Hii katungiwa Acacia
Ku deal na ACCACIA ni swala jepesi sana peleka wale jamaa wa mazingira NEMC or whatever wawatungie uongo wa kufa mtu.

Peleka watu wa ajira wawapime kwa viwango vya kimataifa kulazimisha awafuati masharti wafunge mgodi mpaka wajirekebishe etc to do with fitna nakwambia wenyewe wangenawa, ukizingatia Barrick wapo tayari kuwatoa.

Tukiwaambia Tanzania bado ni bado
 

ZEE LA HEKIMA

JF-Expert Member
Aug 10, 2015
1,298
2,000
Inasikitisha. Sana ! Nashindwa kuelewa ni kwa nini serikali inaweza kutunga sheria hii. Hii sheria mpya ya makampuni HAIFAI, HAIFAI, HAIFAI. Eti waziri amepewa mamlaka ya kuamua tu wakati wowote kampuni ifutwe (anapoona inafaa) bila hata kuwapa kwanza wahusika nafasi ya kujitetea?

Mwekezaji gani atakuja hapa kama anajua kampuni yake inaweza kufutwa saa yoyote? Tumetungaje sheria hii wakati tunataka uchumi wa viwanda ambao ni lazima wawekezaji wahusike?

Na ikitokea kuna watu wanaoidai kampuni iliyofungiwa (preferential creditors), wakiona watakosa wanavyodai si wataishitaki serikali yetu iwalipe? Zaidi ya hapo karibu wafanyabiashara wakubwa wote wanachukua mikopo benki kuongezea mitaji yao ndipo wanafungua kampuni.

Benki gani itakubali kutoa mkopo kwa kampuni ambayo inaweza kufungwa wakati wowote? Bila makampuni viwanda vitajengwa na nani? Na je, kwa nini serikali inataka kufunga kampuni ambazo zinalipa kodi?

Kama kuna mkurugenzi amefanya makosa si ashitakiwe yeye binafsi kampuni yake iendelee kulipa kodi nchi yetu ikusanye mapato? SIELEWI kabisa maana ya sheria hii.
 

Adili

JF-Expert Member
Nov 3, 2007
3,146
2,000
This a bad a law especially point 6 and 7.

Surely a company also has an article of association which articulates how the company would be run with shareholders giving the powers of decision to the management. With that reasoning you can’t mix shareholders with management in respect to public listed companies, private listed and co-opreations.

Point 7 is even more absurd you can’t just decide to shut down. Creditors won’t borrow to a company in the first place if they knew it will be stroked down by government decidion any moment.

There are assemesment before deciding to lend none more crucial than the liquidity of the company and its overall financial performance especially with long term debentures/loans sasa tena ukisema kampuni inaweza futwa na mpuuzi that is not assuring.

This is just a very bad law in the business world which adds the aspect of uncertainty to everyone hivi ni akina nani wanatunga hizi sheria.
Creditor will not lend....
 

Cosmo 1

JF-Expert Member
Nov 9, 2010
460
500
This a bad a law especially point 6 and 7.

Surely a company also has an article of association which articulates how the company would be run with shareholders giving the powers of decision to the management. With that reasoning you can’t mix shareholders with management in respect to public listed companies, private listed and co-opreations.

Point 7 is even more absurd you can’t just decide to shut down. Creditors won’t lend to a company in the first place if they knew it will be stroked down by government decidion any moment.

There are assemesment before deciding to lend none more crucial than the liquidity of the company and its overall financial performance especially with long term debentures/loans sasa tena ukisema kampuni inaweza futwa na mpuuzi that is not assuring.

This is just a very bad law in the business world which adds the aspect of uncertainty to everyone hivi ni akina nani wanatunga hizi sheria.
Hupo sahihi, benki ikukopeshe nini wakati wanajua kabisa muda wowote ule Kampuni yako inafungwa? Na hii pia inaweza kuaribu utaratibu mzima wa mikopo katika mabenki labda tu kama mabenki yetu yatakuwa yamesoma huu mswaada kwani muda wowote yanaweza kupigwa.
 

pappilon

JF-Expert Member
Jan 27, 2015
2,981
2,000
This a bad a law especially point 6 and 7.

Surely a company also has an article of association which articulates how the company would be run with shareholders giving the powers of decision to the management. With that reasoning you can’t mix shareholders with management in respect to public listed companies, private listed and co-opreations.

Point 7 is even more absurd you can’t just decide to shut down. Creditors won’t lend to a company in the first place if they knew it will be stroked down by government decidion any moment.

There are assemesment before deciding to lend none more crucial than the liquidity of the company and its overall financial performance especially with long term debentures/loans sasa tena ukisema kampuni inaweza futwa na mpuuzi that is not assuring.

This is just a very bad law in the business world which adds the aspect of uncertainty to everyone hivi ni akina nani wanatunga hizi sheria.
Where can i find the Company Act documents?!
 

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