In terms of the Companies Act, 2002 (Cap RE 212) (the "Act"), every company incorporated or registered in Tanzania as a branch of a foreign company has an annual filing obligation with the Registrar of Companies, also called the Business Registrations and Licensing Agency ("BRELA").
In the case of a locally incorporated company (local subsidiary), the requirement is to file an annual return in the prescribed form, accompanied by a copy of the audited accounts (except for those companies exempt from an audit obligation in terms of the Act).
This return is due on a date not later than:
(i) the anniversary of the company's incorporation; or
(ii) the date of filing of the preceding annual return (if filed on a date other than the incorporation anniversary date).
In the case of a locally registered branch of a foreign company, annual accounts need to be submitted every calendar year in such form, and containing such particulars and including such documents, as provided for in the Act. In practice, the annual return is prepared soon after the annual general meeting at which the accounts are presented.
Consequences of non-compliance
Late filing of annual returns or any other filing required under the Act will result in a late filing penalty. In instances of more serious and extended defaults, BRELA may assume that the company is no longer trading and issue notice of intention to strike the company off the company registry. In most cases, such action is accompanied by sanctions against owners and officers of the offending company.
Three-month deadline to submit outstanding filings
On 8 February 2017, BRELA issued a public notice giving a three-month deadline for local companies and local branches of foreign companies to file all outstanding filings or risk the consequences listed above. The deadline for compliance with the notice is 7 May 2017.
The notice, which is available on the BRELA website, states the following: "Companies that ... fail to comply with this directive within the specified period will be struck off the Registers and their owners and officers be taken to Court, starting from the 8th May 2017."
The notice is accompanied by a list of companies that, among other things, reflects the years of annual returns not paid. ENSafrica has reviewed the list and note that there are several inconsistencies, such as outdated and inaccurate company information. We have liaised with BRELA officials in this regard and have been informed that each company should independently contact BRELA, in writing, concerning any incorrect company information. Any supporting evidence establishing the inconsistency should be submitted, especially copies of the exchequer receipts issued by BRELA and/or copies of other relevant documents stamped by BRELA.
Steps to be taken
We suggest that every company urgently review their compliance status to confirm that their corporate filings are up to date, and that the BRELA records reflect this. The BRELA notice also states that the list provided will continue to be updated as the audit continues. Therefore, most recently incorporated companies are not yet on the list. We therefore advise companies to regularly check the list, which is also available on the BRELA website.
Filing of pending audited accounts must be done before 7 May 2017. There are no filing fees or penalties for filing the accounts with respect to locally incorporated companies. However, there are fees and penalties for filing accounts with respect to branches of foreign companies. The filing fee is USD220 and the penalty is USD25 for each delayed month.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.