Frequently asked questions
Knowing which business structure is right for your business is a very important decision to make. In Tanzania, types of structures for businesses include sole proprietorship, partnership, joint venture and corporation. When picking between these structures, there are several factors that must be considered such as the nature of business, tax benefits and drawbacks; liabilities; partners and investors; and management structure.
Before registering the LLC, you should start by choosing a name and defining the activities that the company will deal with. Have a clear plan of what will be the share capital of the business, value and classification of shares; and decide the shareholding structure and directorship. Registration will start at the Business Registration and Licencing Authority (BRELA), where after the issuance of the Certificate of Incorporation, registrations with Tanzania Revenue Authority (TRA) and Business Licencing Authority are mandatory before you can commence any operations.
Directors are appointed by the shareholders to manage the company. Directors might be delegated with certain powers. They take part in board meetings to make the important decisions for strategic and operational concerns of the business.
This is an owner of a company who receives an interest by giving capital during the starting of a company or buying its share. A shareholder remains to be an independent legal person although they own the corporation. They have voting rights to elect the directors of the company and they also have the right to be present during annual general meetings along with access to annual reports.
A shareholders’ Agreement regulates the relationship between shareholders. It is important as it governs the management of the company and dictates how the company will deal with foreseeable and unforeseeable future events. Several issues may be included in the Shareholders’ Agreement such as capital-raising and financing, share transfer restrictions, varied dividend policy etc.
With a merger, two companies join forces to become a new company, which will result in a third, separate legal entity with an entirely new name, board, and ownership. But, in a joint venture, two companies agree to work together for a specific project or period, but also each continues their individual businesses.
Prudently, yes. Before committing to any transaction, you’ll want to ensure that you have every possible detail available to you. This will ensure that you know exactly what you are buying, the extent of liabilities that you are taking on, any potential risks that are in the pipeline such as outstanding litigation or contracts that may be problematic. Ideally, you should investigate the company’s legal standing, financial records, physical assets, IP, licenses, permits, important employees, and contracts, to mention a few.
Mergers and Acquisitions (M&A) are the processes by which two or more companies combine into one. However, the two approaches are slightly different. Mergers happen when two companies join together, usually because they are around the same size and want to take the advantage of joining forces, such as the ability to increase sales, capabilities, or efficiencies. On the other hand, an acquisition happens when one company purchases another business and brings it into its operations (or “acquires” it). Unlike during a merger, the two companies will not be equal partners in a new enterprise, one of them will come into the fold of the other one. Nonetheless, the result of these processes is the same.
A non-citizen in Tanzania means a person who is not a citizen of United Republic of Tanzania.
Yes, a non-citizen can be employed and / or work in Tanzania if they possess work and residence permits.
A work permit is an official document that gives a foreigner permission to work in Tanzania. A work permit is given to any non-citizen who secures employment, invest or establishes a business in Tanzania.
Work permits are issued by the government of Tanzania under the Ministry of Labor and Employment.
This is a permit given to a foreigner who wants to reside in Tanzania for different purposes including but not limited to employment, investment, and business ventures.
Yes, a residence permit is not automatic. A foreigner must apply for both work and residence permits to be able to work and reside legally in Tanzania.
No, work permit is not permanent but valid for only two (2) years subject to renewal after every such period.
Both work and residence permits are categorized and issued in different classes as follows:
This is an exclusive and assignable legal right, given to the originator for a fixed number of years, to print, publish, perform, film or record literary, artistic or musical work.
A copyright owner has the exclusive right to prohibit or authorize reproduction, distribution, public performance, public display and creation or production of his/her derivative works.
Under the laws of Tanzania, the protection of copyright is for the life of the author and for an additional fifty years after the author’s death.
Not really. The Copyright and Neighbouring Rights Act sets restrictions on what is copyrightable. Laws, decisions of the courts or administrative bodies, news published, broadcast or publicly communicated by any other means, ideas, procedure, method of operation, concept principle, discovery or mere data cannot be copyrighted.
Yes, a copyright owner or licensee can transfer copyright ownership or license certain rights of copyright ownership to other parties.
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