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:
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)] and submit a copy to BRELA within 14 days [S.333(3)].
- Find a liquidator and prepare members’ special resolution for his appointment [S.340(1–2)].
- 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)]. 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)]. 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)]. 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. 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.
- 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).
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)].
Costs for the full process
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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