LEGAL UPDATE: Tanzania Companies (Beneficial Ownership) Regulations, 2020
Tanzania Companies (Beneficial Ownership) Regulations, 2021
On 14th May 2021, the Ministry of Industry and Trade through Government Notice no. 391 of 2021 published the Companies (Beneficial Ownership) Regulations, 2021.
The new regulations are in place to implement the beneficial ownership requirement introduced by the Companies Act through amendment made by the Finance Act, 2020.
The Regulations put a requirement for companies to identify and register all the beneficial owners of the Companies. The Regulations has four parts i.e. Preliminary provisions which include the Interpretation, Information of Beneficial Owners, Register of Beneficial Owners and Miscellaneous Provisions.
Under this part, the Regulations provide the interpretation of Beneficial Owner to mean 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.
Information of Beneficial Owners.
Under this part, the Regulations provide the following requirements; -
- A company incorporated or registered under the Companies Act (the Act) to submit the particulars of its beneficial owners to the Registrar of Companies (the Registrar).Companies are required to identify beneficial owners and enter their particulars in the register of members and beneficial owners.
- Once a person ceases to be a beneficial member, to file a notice to the Registrar within thirty days from the date of cessation. In case of default, every members of the company shall be jointly and severally liable to late filing fees.
- Persons who are registered as owners of shares but do not have beneficial interest in such shares to file a declaration to that effect with the Company within thirty days from the date on which their names are entered into the register if members of the company. In case of changes in the beneficial interest of such shares, such change should be declared to the Company within thirty days from the date of such change.
- A person who holds or acquires interest in shares of a company not registered in his name, is also required to file a declaration disclosing such interest to the Company within thirty days after acquiring such beneficial interest in the shares and in case of change, such change has also to be declared to the Company within 30 days from the date of such change and a company has to file a return with the Registrar in respect of such declaration within thirty days from the date of receipt of the declaration.
- Companies are required to lodge the particulars of the change of its beneficial owners with the Registrar within thirty days from the date of change.
- Companies are also required to notify the Registrar whether there has been any change in beneficial interest resulting from share transfer or transmission or, increase or reduction of share capital or a restructuring of a company’s share capital or changes in the voting rights. Unless this requirement is complied with, the registrar shall not register a notice of acquisition of shares or any other document relating to changes in share capital or voting rights. The notices of changes in beneficial ownership under this regulation, must be signed by at least one director or company secretary and the certified true copy of the official identification document of every beneficial owner shall be submitted to the registrar.
Companies are prohibited to use or disclose any information about its beneficial owner except for communicating with the beneficial owner concerned; in order to comply with any requirement of these Regulations; or in compliance with a court order.
Register of Beneficial Owners
Under this part, the Regulations provide that the following;
- Information on the beneficial owners of every company provided to the registrar shall be entered and held in a register of beneficial owners kept by the Registrar.
- The Registrar reserves a right to refuse to register any document of a company which is required to be registered if a beneficial ownership information is not submitted if he is not satisfied that the company has provided accurate and up to date information on the beneficial owners of the company as required by the Act and such decision shall be communicated to the company.
- The submission of documents to the registrar may be in such format or by such means including electronic form and by electronic communication as the registrar may deem appropriate
Offences and Penalties
The regulations make the following acts as offence(s);
- Failure to keep record of beneficial owners;
- Failure to provide information to the Registrar about a change in beneficial ownership of a company;
- Failure to provide the Registrar with a declaration containing information on the beneficial owners of the company;
- Contravention of any provision the Regulations.
The Regulations impose a fine of not less than five million shillings but not exceeding ten million shillings in case one is liable for any of the provided offences
Non-Disclosure Of Confidential Information
When performing the duties under the Companies Act or even after termination of their employment, the Registrar and other officers are obliged to , neither to communicate confidential information obtained in their capacities pursuant to the provisions of these Regulations to persons not entitled to receive it nor to disclose it to the public or make other use of it.
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