Q&A – 28 July 2014
Taking over of a loan
We are a relatively new bank in the country and want to take over a loan from another bank for one of their borrowers who intends to move to us. The problem we face is how do we pay that bank, get the title discharged and reregistered in our name. There will be a point whereby we will be unsecured and our board does not want that to happen. Please guide us.
EH, Dar
If your board is so conservative, then you might find it hard to make money in the market. The transaction is not as complicated as you think it to be. We would guide you or your attorneys to follow the following steps: (1) get a confirmation from the other bank on what amounts are payable to them as full and final discharge of the loan; (2) meanwhile ensure that all your other loan documentation are in place and executed; (3) write to the other bank informing them that you intend to take the loan over and that upon payment of the outstanding amounts in full they should commit to release the original security documents (including title deed if one) directly to you, including all signed discharge of mortgage forms; (4) once the other bank confirms that it shall comply with 3 above, you proceed to loan the money to the borrower by paying of the other bank (5) thereafter proceed to discharge the previous mortgage that was in favour of the other bank and at the same time register your mortgage.
The transaction above is quite standard in the market and in our experience banks have kept their commitment when it comes to release and discharge of securities. One cautionary move for you to take is to ensure that the other bank is holding a valid mortgage and title, which can be verified by the registrar of titles at the Ministry of Lands. We recommend that you do this just in case the other bank is holding on to a fake title, of which there are many in the market. Your lawyers can provide more details.
Naturalization of foreign husband
I am a Tanzanian woman married to a foreign man and had agreed that we will settle and establish our family in Tanzania. However, it bothers me because my husband still has to apply and get residence permits from immigration offices in Tanzania. He has tried to apply for citizenship through my citizenship but that seems to be difficult for reasons unknown to me. Applying and getting residence permits is a nightmare and we cannot spend our entire lives applying and reapplying. Please advise the procedures we can undertake so he can get Tanzanian citizenship by virtue of our marriage.
AR, Arusha
The law which provides for citizenship in Tanzania is the Citizenship Act of 1995 which provides that a woman who is married to a citizen of the United Republic shall at any time during the life-time of the husband be entitled, upon making an application in the prescribed form, to be naturalized as a citizen of the United Republic. As per this provision, it is a Tanzanian man who can “transfer” his citizenship to a foreign woman.
Unfortunately the Citizenship Act does not have a similar provision for a Tanzanian woman married to a foreign husband. This is quite unfortunate and one could say it is discriminatory towards women.
Your husband can apply for citizenship but must do so like any other immigrant who wishes to get Tanzanian citizenship by attaining the qualifications as stipulated in the law which are as follows: (a) that he has resided in the United Republic throughout the period of twelve months immediately preceding the date of the applications; and (b) that during the ten years immediately preceding the said period of twelve months he resided in the United Republic for periods amounting in the aggregate to not less than seven years; and (c) that he has an adequate knowledge of Kiswahili or the English language; and (d) that he is of good character; and (c) that, in terms of his past and potential contribution to the national economy, scientific add
Single shareholder company
There was a law which was enacted two or three years ago, which would allow a single shareholder company by amending the Companies Act. Has it come into force yet? If not, what other alternative do I have? At the moment we have opened various subsidiaries in Tanzania whereby the managing directors’ end up owning a share so that we can comply with the companies act. Is this legal?
TK, Dar
Very sadly the Business Laws (Miscellaneous Amendment) Act, 2011 which allows single shareholder companies has yet to come into force because the regulations are still in the process of being drafted. We must admit that this has taken abnormally long.
The other option that you have is to register under the Business Names Registration Act in which you can register as a sole trader; however you will not have the luxury of a limited liability company which is enjoyed by other corporate bodies registered under the Companies Act.
We are aware of many companies that have resorted to having their MDs own shares to comply with the Companies Act. Whilst this is an easy option and it is legal, unfortunately it is not the best option since the MDs could move from your company, have an equitable claim on the share, be entitled to dividends and the like. If you are a foreign company, we would recommend you register another offshore company that could own that one share. It is always better to fully control your shareholding through your own registered companies as opposed to individuals.