CORPORATE LAW UPDATE: RE-REGISTRATION OF NGOs FORMERLY REGISTERED AS COMPANIES LIMITED BY GUARANTEE IN TANZANIA INTO NGOs REGISTRY

• A summary regarding requirements for registration of NGOs which were previously registered as Companies Limited by Guarantee and yet to possess qualifications as NGOs in Tanzania
• Fate of NGOs formerly in the companies register and failed to register with the NGOs Registrar within time as specified by the Written Laws (Miscellaneous Amendments) Act No 03 of 2019 to the companies act no. 12 of 2002
• Fate of organizations formerly registered as NGO’s but they currently do not possess qualifications as NGOs in Tanzania
• Our synopsis of the entire exercise of re-registering NGOs styled as CLGs to the NGOs Registry

1.0 Introduction

On 30^th June 2019, the President of the United Republic of Tanzania assented to the Written Laws (Miscellaneous Amendments) Act No. 03 of 2019 (hereinafter referred to as “the Miscellaneous Amendments Act No. 03 of 2019”), which was passed by the Parliament in the same month of June 2019.

The Miscellaneous Amendments Act No. 03 of 2019 has added new provisions and amended some of the current provisions of the Companies Act No. 12 R.E 2002 (hereinafter referred to as “the Companies Act”) and the Non-Governmental Organizations Act No. 24 of 2002 (hereinafter referred to as “the NGOs Act”). However, our focus in this Article will be on the new requirement of re-location of entities to appropriate registries after redefining a company and also an NGO.

Section 4 of the Miscellaneous Amendments Act No. 03 of 2019 has amended Section 2 of the Companies Act on the definition of a company. It defines a company as “a company formed and registered under this Act (the Companies Act) or an existing company established for investment, trade or commercial activities and any other activity as the Minister may, by notice published in the Gazette, prescribe.”

Section 29 of the Miscellaneous Amendments Act No. 03 of 2019 has amended Section 2 of the NGOs Act to define an NGO as “Non-Governmental Organization” also known by its acronym “NGO” and which includes Community Based Organisation (CBO) means a voluntary grouping of individuals or organizations which is non-partisan or non-profit sharing established and operates for the benefit or welfare of the community or public, organized at the local, national or international levels for the purpose of enhancing or promoting economic, environmental, social or cultural development or protecting environment, good governance, law and order, human rights and lobbying or advocating on such issues.”

Furthermore, Section 29 of the Miscellaneous Amendments Act No. 03 of 2019 states that all companies, trusts, trade unions, religious organizations, societies, political parties, sports associations and any other associations registered under any written law other than the NGOs Act not to be recognized as NGOs.

In that respect, Breakthrough Attorney’s corporate team has prepared this brief summary of the outcome of non-compliance to the timeline set for adhering to the terms of the specific provisions of the Miscellaneous Amendments Act No. 3 of 2019. In essence this is a follow up Article to our previous updates, posted in August 6^th 2019.

2.0 Consequences of failure to relocate to the appropriate registry within time specified by the Written Laws (Miscellaneous Amendments) Act No. 03 of 2019 under the Non-Governmental Organizations Act No. 24 of 2002

Specific requirements

The Miscellaneous Amendments Act No. 03 of 2019 under Section 6 places a requirement for all companies which were registered under the Companies Act as companies limited by guarantee without a share capital to be registered as Non-Governmental Organizations (“NGOs”) under the NGOs Act and struck off from the register of companies.

On an equal footing, the Miscellaneous Amendments Act No. 03 of 2019 under Section 32 requires all those organizations which were registered under the NGO’s Act but does not carry qualities of an NGO according to the new definition of an NGO, to be deemed to have been de-registered and has to shift to their appropriate registries.

The Miscellaneous Amendments Act No. 03 of 2019 has imposed a time limit of only two months from the first date of its operation, which was 30^th June 2019 for all entities to shift to their appropriate registries. Therefore, all companies limited by guarantee (with no share capital) operating as NGOs were required to be registered as NGOs by 31^st August 2019. The same applies to those organizations that were registered under the NGOs Act but they no longer qualify as NGOs.

Consequences for not complying

After expiration of the above deadline set by Sections 6(1) and 32(1) of the Miscellaneous Amendments Act No. 03 of 2019 the following has happened:-

1. Unqualified companies under the Companies Act were automatically struck out from the Register of companies
2. Unqualified companies under the Companies Act were required to make applications to the Minister Responsible for Trade, for extension of time to shift to the appropriate registry;NOTE:
   This is an administrative leeway, which has been extended for meritorious applicants who can justify the reason for belated relocation to the new NGOs Registry. As far as we are aware, this exercise too has been closed and names of the extension-seeking entities have already submitted for consideration.
3. Unqualified organizations under the NGOs Act are deemed to have been de-registered;
4. Unqualified organizations under the NGOs Act are required to make applications to the Minister responsible for NGOs, for extension of time to shift to appropriate registries.

NB:
The Ministers Responsible for Trade and NGOs have discretion to grant or deny an application for extension of time to shift to appropriate registries. However, where an application for extension of time is granted, the Minister responsible will communicate such information to the Minister under whom the registry in which an entity required to register now belongs.

3.0  Our Synopsis of the Exercise
Application for extension of time is meant to allow entities to relocate to their appropriate registries through directions specified in the Miscellaneous Amendments Act No. 03 of 2019, which are in some way different from the normal process of registration.  However NGOs , which have failed to relocate to their new appropriate registries within the time specified might opt to go through the registration process as new NGOs, which did not exist before. This will remove the hustle of waiting and following up the administrative process of extension process while staying defunct as an obsolete entity.

 

Important Notice:

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Breakthrough Attorneys, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.