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| Reservation of company name |
| We are a foreign company wishing to register in Tanzania. Our company name is well known throughout Eastern Europe and Asia. I have heard some people in the local market talk about name stealing whereby once we start the registration process, our name will be registered by someone else before we have fully complied, and then we would have to buy the name of these persons. How can we protect ourselves? We have informally searched for the name we intend to register and the name is available. |
| FL, Slovenia |
We have not heard of or come across such allegations but will nonetheless proceed to answer the question. When you submit an application for a certain name, you may ask the registrar to reserve the name. The Companies Act is specific in relation to this in that the Registrar may, on written application, reserve a name pending registration of a company or a change of name by a company. Any such reservation shall remain in force for a period of thirty days or
such longer period not exceeding sixty days, as the registrar may, for special reasons allow and during such period no other company shall be entitled to be registered with that name.
You must note that no name can be reserved and no company can be registered by
a name which, in the opinion of the Registrar, is the same as or too like a name appearing in the index of company names or is otherwise undesirable.
The law does come to your protection and we suggest you appoint a good registration agent/law firm and proceed. |
| Mortgage versus lease |
| We have lent money to a company and created a mortgage over their building. Our relationship has been solid for the past three years. Earlier this year, the company has started defaulting and we issued them |
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| with a notice to proceed under the mortgage instrument. It seems like the borrower informed the tenant, which is a very strong party in Tanzania, who went ahead and got injunctive relief from Court claiming that they have prepaid rent for the next three years. We now cannot recover nor sale the property and the borrower continues to default. What should we do? |
| LM, Dar |
It is very difficult to guide you on this without reading all the documents. However as a matter of principle, you should have had a clause in the loan documentation that disallows collection of advance rent for more than a period of a year. You might not have had that.
If the borrower has defaulted, and if you do not wish to engage in a Court battle with the current occupier/tenant, we believe that subject to the injunction being lifted, you can proceed with the sale of the mortgaged premises, with the buyer purchasing it subject to the lease. Again we need to look at the lease- surely there is mischief here between the borrower and occupier which may be hard to prove. The fact that there is a long term buyer will also affect the sale price and these are factors you need to take into account prior to making any such moves. It is not unwise to contact your attorneys to find a practical solution that will take into account both the time and funds needed to get out of this.
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| Registration of Debenture |
| We have loaned money to an individual and created a third party mortgage. The debentures that are duly signed, have not been registered for the past six months due to issues with locating the file at the Business Registration and Licencing Authority (BRELA). Now that the file has been found BRELA is refusing to register the debenture. What do you suggest we do? |
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| GK, Dar |
The law is clear in that every charge created by a company registered in Tanzania so far as any security on the company's property or undertaking is conferred thereby, be void against the liquidator or administrator and any creditor of the company, unless the prescribed particulars of the charge, together with the instrument, if any, by which the charge is created or evidenced are delivered to or received by the Registrar for registration within forty two days after the date of its creation. A debenture falls into this category and hence should have been registered within the forty two days.
You have a couple of options. First you can re date the debentures and get the borrower to sign them again with a current date and make sure all this is properly documented. Most borrowers are normally reluctant to do that when they are in default. We hope that is not the case here.
Another option you have is to apply for extension of time in Court to register a charge and invoke s105 of the companies act 2002 (R.E. 2002) which states: The court, on being satisfied that the omission to register a charge within the time required by this Act or that the omission or misstatement of any particular with respect to any such charge or in a memorandum of satisfaction was accidental, or due to inadvertence or to some other sufficient cause, or is not of a nature to just and equitable to grant relief, may, on the application of the company or any person interested, and on such terms and conditions as seem to the court just and expedient, order that the time for registration shall
be extended, or, as the case may be, that the omission or mis-statement shall be rectified.
Your grounds are quite solid in that you failed to register the charge because of a misplacement of the company file, which unfortunately is not very uncommon here. Please be guided accordingly. |
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Q&A with FB Attorneys
C/O The
Daily News,
P.O. Box 9033,
Dar es Salaam, Tanzania.
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This column is intended to give you a general over view of
the Law. It is not a substitute
to the role of your legal advisor. If you
have legal issues, you are strongly recommended
to contact your Attorney. |
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