Financial Institutions in Tanzania have the right to claim outstanding loan balances from borrowers after mortgaged properties sale
Tanzania Companies Act: New deadline for submission of the information in relation to beneficial owners
Legal Development 11 January 2022 11 January 2022
This briefing highlights the recent extension by the Minister of Industry and Trade (the Minister) of the deadline for submission of beneficial ownership information to the Registrar of Companies (the Registrar).
The Finance Act, 2020 introduced a new requirement for companies to submit information identifying beneficial owners to the Registrar using Form 14b.
According to the Companies Act, companies incorporated before 1 July 2020 were initially given 6 months from July 2020 to submit the required information to the Registrar. On 12 February 2021, pursuant to a notice issued under the Companies Act, the Minister extended the deadline to 31 December 2021.
On 4 January 2022, the Minister issued another public notice that further extends the deadline for submission for 6 months from 1 January 2022. Therefore, the relevant information must be submitted to the Registrar before 30 June 2022. The notice indicates that the extension is due to the various challenges associated with this new requirement and requests from stakeholders.
A recap on beneficial owners
A beneficial owner is a natural person:
- who directly or indirectly ultimately owns or exercises substantial control over an entity or an arrangement;
- who has a substantial economic interest in or receives substantial economic benefit from an entity or an arrangement directly or indirectly whether acting alone or together with other persons;
- on whose behalf an arrangement is conducted; or
- who exercises significant control or influence over a person or arrangement through a formal or informal agreement.
Percentage threshold of ownership or control
Whilst the Companies Act and Regulations remain silent with regards to the percentage threshold of ownership or control that would trigger the requirement to file beneficial owners’ information, the Business Registrations and Licensing Agency (BRELA) has published guidance that companies should submit the information of beneficial owners who hold more than twenty five percent (25%) of shares or decision-making power in a company.
Non-compliance with this requirement may result in a penalty of between USD 2,200 and USD 4,340 being imposed on the company.