Tanzania
Corporate Guide

What are the different types of companies that can be incorporated in Tanzania?

Private company limited by shares

This is a company which, by its articles of association, is restricted in its right to transfer shares, is limited under the CA to have not more than 50 members and is prohibited from making any invitation to the public to subscribe for shares.

Although the law was amended to allow for a single shareholder company, the relevant regulations are yet to be issued by the Minister of Industry and Trade on the governance and operability of such an entity. Therefore, the practice remains that this type of company is required to have a minimum of two shareholders who can be individuals or corporate shareholders.

The CA requires companies to have at least two directors.

The minimum authorised share capital required for a company to be registered in Tanzania is TZS 20,000 (USD 7.40).

When this type of company is wound up, its liability is limited to the unpaid nominal value of its shares. No member of a company limited by shares can be required to pay more than the face value of their shares.

Private company limited by guarantee with share capital

Under this type of company, the liability of its members is limited by its memorandum of association to an amount that the members undertake to pay, if necessary, upon liquidation of the company. Therefore, its members have no liability as long as the company is a going concern. 

Private company limited by guarantee with no share capital but intends to promote commerce, investment and trade

Its members are liable to pay the guaranteed amount which arises only when the company is liquidated. 

In 2019, the law was changed. Previously, it required all companies limited by guarantee without share capital to operate only for investment, trade, or commercial activities, and any other activities prescribed by the Minister of Industry and Trade through a notice published in the Gazette.

Unlimited company

The liability of the members of an unlimited company is unlimited. The following are the basic characteristics of unlimited companies:

• Members have unlimited liability (if the company is being wound-up, members can be made to contribute to the company’s assets to pay its debts).
• They can be set up with or without a share capital. 
• They are not subject to the same restrictions on alteration of capital as other types of companies and do not normally have to file annual accounts with the Registrar of Companies unless they are the parent or subsidiary of an undertaking whose members’ liability is limited.

Public Company

This type of company is limited by shares or a guarantee and has a share capital. Its memorandum of incorporation states that the company is a public limited company.

This type of company requires seven or more members for it to be registered as such.

The minimum authorised share capital required for a public company is TZS 1 billion (USD 370,968) for it to be listed on the Dar es Salaam Stock Exchange (DSE). A public company need not be listed on the DSE.

The transfer of shares in this type of company is unrestricted, meaning the public is invited to purchase shares.