SUMMARY:This article addresses the question of how to close a company in Tanzania. Several people have asked me about this, and I promised to prepare a guide. Here is the guide. To close a company (whether it is dormant, inactive, non-operating, or any other type) in Tanzania through members’ voluntary winding up, you need to complete six steps. The first step is preparation for winding up. Readmore.
The second step is the preparation and submission of the declaration of solvency to BRELA. The third step is the preparation and submission of winding-up resolutions and notices. The fourth step involves selling the company’s assets and settling its liabilities. The fifth step is conducting a final meeting of shareholders. Finally, the sixth step is the dissolution of the company.
Introduction
The voluntary winding up of a company in Tanzania is governed by the Companies Act, 2002. This article explores the procedural, legal, and regulatory framework for dissolving an inactive company. By referencing specific sections of the Act, the article aims to provide a comprehensive guide for company directors, shareholders, and consultants.
Once the shareholders (also known as members) of a company makes a decision to wind up the company voluntarily then they must follow a strict timeline otherwise they may face hurdles in the process and may as well incur penalties. The steps involved in a members voluntary wind up are as follows:
Steps to close a company through members’ voluntary winding up
Preparation for winding up
The first step in a members voluntary winding up process is to prepare the company’s financial statements, reflecting its current financial position. Then, you will need to write to the TRA to inform them of your intention to wind up the company and inquire about any pending tax matters. Communicating with TRA is important because you will need “company closure tax clearance” in the winding up process. You will also need your username and password to access BRELA’s online system. The user must have access to the company data and the authority to update it.
Preparation and submission of the declaration of solvency to BRELA (Form 338)
The second step in a members voluntary winding up process is to prepare and submit to BRELA a declaration of solvency (Form 338). This has to be done by the Board of Directors within 30 days before the shareholders pass a resolution to wind up the company. This is the requirement of section 338(1) of the Companies Act. 1Section 338(1) Where it is proposed to wind up a company voluntarily, the directors of the company or, in the case of a company having more than two directors, the majority of the directors, may, at a meeting of the directors make a declaration in the prescribed form to the effect 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 such period not exceeding twelve months from the commencement of the winding up as may be specified in the declaration The following images show the contents of Form 338 for your information.
Preparation and submission of winding-up resolutions and notices
The third step in a members voluntary winding up process is to prepare, submit and publish resolutions and notices as per the following:
- Prepare members’ special resolution for the voluntary winding up of the company [S.333(1)(b)]2Section 333(1)(b) if the company resolves by special resolution that the company be wound up voluntarily. and submit a copy to BRELA within 14 days [S.333(3)].3Section 333(3) A copy of any resolution passed as referred to in subsection (1) must be forwarded to the Registrar within fourteen days of the resolution being passed.
- Find a liquidator and prepare members’ special resolution for his appointment [S.340(1–2)].4Section 340(l) The company in general meeting shall appoint one or more liquidators for the purpose of winding up the affairs and distributing the assets of the company, and may fix the remuneration to be paid to him or them. Section 340(2) On the appointment of a liquidator all the powers of the directors shall cease, except so far as the company in general meeting or the liquidator sanctions the continuance thereof.
- Prepare a notice of voluntary winding up and publish it in the Government Gazette and a local newspaper within 14 days after passing of the resolution [S.334(1)].5Section 334(1) When a company has passed a resolution for voluntary winding up, it shall, within fourteen days after the passing of the resolution, give notice of the resolution by advertisement in the Gazette, and also in some newspaper circulating in Tanzania. Submit to BRELA a copy of the gazette and the newspaper within 14 days after passing the resolution.
- The appointed liquidator shall prepare Notice of Appointment (form 360a) and submit it to BRELA within 14 days after his appointment [S.360(1)].6Section 360(1) The liquidator shall, within fourteen days after his appointment, publish in the Gazette and deliver to the Registrar for registration a notice of his appointment in the form prescribed. See the image below of form 360a for reference.
- The appointed liquidator shall prepare Notice of Appointment (form 360b) and publish it in government gazette and local newspaper within 14 days after his appointment [S.360(1)].7Section 360(1) The liquidator shall, within fourteen days after his appointment, publish in the Gazette and deliver to the Registrar for registration a notice of his appointment in the form prescribed. See the image below of form 360b for reference.
Selling the company’s assets and settling its liabilities
The fourth step in a members voluntary winding up is selling of any assets of the company and paying off liabilities and preparing accounts and return in accordance with S.345(1) of the Companies Act by filling form 345.8Section 345(1) Subject to the provisions of section 346, as soon as the affairs of the company are fully wound up, the liquidator shall make up an account of the winding up, showing how the winding up has been conducted and the property of the company has been disposed of, and thereupon shall call a general meeting of the company for the purpose of laying before it the account, and giving any explanation thereof. And this is done by the liquidator. The images below show the details required to be filled in the form.
Conducting a final meeting of shareholders
The fifth step in a members voluntary winding up process is conducting the final meeting of the members and it’s the role of the liquidator to organize this. In this meeting, the liquidator shall present the accounts and winding up report to the members [S.345(2-3)].
- He has to issue at least 30 days notice of the meeting and shall advertise the notice in the government gazette and local newspaper [S.345(2)]. The notice shall specify the time, place and object of the meeting.9Section 345(2) The meeting shall be called by advertisement in the Gazette, and in a newspaper circulating in Tanzania, specifying the time, place and object thereof, and published thirty days at least before the meeting.
- He shall present to the members the statement of affairs and the way he conducted his winding up.
- Within 14 days after the meeting, he shall submit to BRELA copy of the accounts [S.345(3)] and shall produce return of the meeting (Form 345).10Section 345(3) Within fourteen days after the meeting, the liquidator shall deliver to the Registrar a copy of the account, and shall make a return to him of the holding of the meeting and of its date, and if the copy is not delivered or the return is not made in accordance with this subsection the liquidator shall be liable to a default fine. Provided that, if a quorum is not present at the meeting, the liquidator shall, in lieu of the return mentioned above make a return that the meeting was duly summoned and that no quorum was present thereat, and upon such a return being made the provisions of this subsection as to the making of the return shall be deemed to have been complied with.
Dissolution of the company
The sixth step in a members voluntary winding up process is dissolution of the company by the Registrar of companies. The Registrar on receiving the accounts and the returns from the liquidator, he will immediately register them, and on the expiration of three months from the registration of the return the company shall be deemed to be dissolved [S.345(4)].11Section 345(4) The Registrar on receiving the account and either of the returns mentioned above shall immediately register them, and on the expiration of three months from the registration of the return the company shall be deemed to be dissolved: Provided that, the Court may, on the application of the liquidator or of any other person who appears to the Court to be interested, make an order deferring the date at which the dissolution of the company is to take effect for such time as the court thinks fit.
Estimated costs of closing a company through members’ voluntary winding up
For your budgeting purposes, below are the costs you should expect to pay for the whole process.
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 Kessy Juma is the founder of Miamia Trading Company (miamiatz). He is a Techpreneur with roots in accountancy. He believes that any business is good as long as it caters to the right market using the right strategy. 
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