Many Tanzanian families and investors hold company shares through someone else’s name without ever asking a simple question: What happens to that arrangement if that person dies tomorrow?

Consider the following scenario: a father registers company shares in his name, but everyone in the family knows that the shares belong to his children. A business partner holds part of a company “for” an investor who, for personal or regulatory reasons, prefers not to appear on the company’s records. A relative agrees to hold shares so that the company can meet local shareholding requirements.

This is known as a nominee arrangement. The person whose name is on the company’s records is the nominee. The person who owns the economic benefit or the real stake is the nominator, also known as the beneficial owner. It is one of the most common and least examined structures in private wealth planning.

As this Article explains, it is also one of the easiest structures to get wrong.

1. Why Families and Investors Use Nominees and Why the World Is Now Watching Them Closely

Nominee arrangements are used for entirely legitimate reasons: confidentiality, holding shares for children who are still minors, meeting local ownership thresholds or simple administrative convenience. Tanzania has never outlawed the practice, and it remains a normal feature of how families and businesses hold wealth.

However, the world has changed around this practice, and Tanzania is changing accordingly. Over the past decade, international bodies, most importantly the Financial Action Task Force (FATF), the global standard-setter for fighting money laundering and terrorist financing, have pushed countries hard to answer one question about every company: who really owns it? Nominee arrangements, because they hide the true owner behind someone else’s name, sit exactly where the FATF’s concerns are sharpest.

Tanzania has already begun to address this issue. The Beneficial Ownership Regulations introduced in 2021 require companies to identify and record who actually stands behind their shares. Another law is currently being discussed in Parliament: The Written Laws (Miscellaneous Amendments) Act, 2026. As of the date of this Article, this remains a Bill before the National Assembly; it has not yet been passed or assented to law and should be treated as pending unless confirmed otherwise. Once enacted, it would go further still, giving “nominee” and “nominator” formal legal definitions for the first time and requiring companies, and eventually a central government register, to record every nominee arrangement in the country.

This is not a uniquely Tanzanian phenomenon. Kenya and several other major African economies have introduced or are introducing comparable beneficial ownership registers, tracing back to the FATF push for transparency. Any family or investor using a nominee structure across more than one African jurisdiction should expect to be asked, sooner rather than later, to disclose who the real owner is.

The critical point for this Article is not that Tanzanian law is silent on death; it is not. Tanzania’s probate and administration laws detail how a deceased person’s property, including company shares, is to be gathered, accounted for and passed on to heirs and beneficiaries. The critical point is narrower and, in some ways, more important: Tanzanian law provides a clear framework for administering a deceased shareholder’s estate, but it does not expressly or comprehensively resolve how that framework interacts with nominee shareholding, beneficial ownership and trust arrangements unless proper estate planning and legal documentation are put in place beforehand. The transparency laws described above in Tanzania and the other African jurisdictions considered in this article solve the disclosure problem. They were not designed to solve this interaction. This is what the rest of this Article is about, and more importantly, what can be done about it.

A useful signal from Kenya

Tanzania’s courts have not yet ruled directly on what happens to a nominator’s interest when a nominee dies. However, Kenya, which shares the same company law foundations as Tanzania and has moved slightly further down the beneficial ownership road, offers a useful signal of where the law is likely to head.

In the 2023 decision of Shah & 7 Others v Mombasa Bricks and Tiles Limited & 5 Others, Kenya’s Supreme Court was asked to decide whether a person who was never a registered shareholder could still enforce a trust over shares, that is, whether the fact that a company’s register was not allowed to record trust arrangements meant that those arrangements simply did not count. The Court said no: the rule against recording trusts on a company’s register protects the register itself from becoming cluttered with private claims. It does not, and was never meant to, wipe out genuine trust between people bound by it.

This is important for the Tanzanian context and for how the central question of this Article is likely to be resolved if it ever reaches a Tanzanian court: a trust is not defeated simply because a company’s records or its beneficial ownership register never showed it. What defeats a nominator’s interest in practice is not the register; it is the absence of trust itself. What the Kenyan case does not resolve is Tanzania’s own probate stage: even accepting that a genuine trust would be enforced if proven, nothing in current Tanzanian probate practice requires an administrator or the probate court to go looking for one. The trust must be brought forward and proven by the nominator; it will not surface on its own.

2. The Gap Nobody Talks About: What Happens When the Nominee Dies

Herein lies the uncomfortable truth at the heart of every nominee arrangement: as far as the company and the law are concerned, the nominee is the shareholder. Not “as good as” the shareholder – the actual, full, recognised shareholder, with every right that comes with it. The nominator’s real ownership exists only informally, as a private understanding between two people.

This informality works well while the nominee is alive and cooperative. This becomes a serious problem when the nominee dies.

When someone dies, everything they legally owned becomes part of their estate, to be gathered, accounted for and eventually distributed to their heirs through the probate process. Shares are treated exactly like any other asset, such as cars, bank accounts or pieces of land. The law does not pause to ask whether the deceased was, in truth, holding some of those shares for somebody else. It simply treats whatever is registered in the deceased’s name as belonging to the deceased.

A recent decision by Tanzania’s High Court illustrates how this happens automatically in practice. In Mary Deogratias Magubo (formerly Mary Boniface Fungo) & 2 Others v The Registrar of Companies (Commercial Division, 25 January 2024), the court confirmed that on a shareholder’s death, the shares pass immediately to whoever is legally appointed to administer the estate at the moment of appointment, with no separate transfer process needed. In this case, the person administering the estate became a shareholder from the date of her appointment, not from any later paperwork with the company. The case had nothing to do with a nominee arrangement, and the court was not asked to consider it. However, it is a real, binding Tanzanian decision confirming that this machinery moves automatically and immediately, regardless of the deceased’s identity.

“If there is no paper trail proving that the shares were always meant for someone else, the nominee’s family, not the true owner, ends up holding all the cards.”

For a nominator with nothing in writing, this is where things go wrong. Their claim to the shares is not a claim to property; it is, at best, a personal claim against the deceased’s estate, competing with everyone else who has a claim on that estate: other heirs, a surviving spouse, and creditors. If the family administering the estate does not know about, believe in, or honour the arrangement, the nominator has very little to stand on.

The one thing that changes this outcome entirely is a properly written and signed declaration of trust, a document made while both the nominee and nominator are alive, clearly stating that the shares are held for the nominator’s benefit. With that document in place, whoever administers the nominee’s estate is legally bound to honour the arrangement and not distribute the shares as though they were the deceased’s own. Without it, the nominator relies solely on goodwill. This is precisely why proper estate planning, a will that accounts for nominee-held shares, a trust deed or a nominee agreement, each prepared with a lawyer’s input, is not a formality to be dealt with later. It is the difference between a nominator’s interest in surviving intact and being lost somewhere in probate.

3. Inside the Probate Process: What a Family Actually Faces

For families and clients unfamiliar with it, it helps them understand what happens on the ground after the death of a nominee shareholder.

1. A death certificate is obtained. Nothing can move forward without it. It is the first document required by any family.
2. Someone applies to the court for authority to administer the estate. If the deceased left a valid will naming an executor, that person applies for a Grant of Probate. In the absence of a will, a close relative typically applies for Letters of Administration. Depending on the size of the estate and whether anyone contests it, this application is made to the High Court or a lower court.
3. The court’s grant is what unlocks shares. Until it is issued, nobody, including the family, the company and the nominator, has any legal authority to deal with the shares.
4. An inventory of the estate is then prepared. This is where every asset the deceased owned is listed, including, as things stand, shares that were registered in the deceased’s name even when those shares were, in substance, being held for someone else. Comparable reasoning from Kenya’s courts suggests that a genuine trust could still be enforced at this stage, although this remains untested in Tanzania, but only if the nominator comes forward with proof of it.
5. The company will only deal with the appointed administrator. The company will only recognise the person who is legally in charge of the estate. At this stage, the administrator effectively decides the nominator’s fate: they may recognise the nominator and take steps to secure their interest in the shares, or they may register someone else, another heir, or a buyer as the new shareholder instead. In the absence of a trust document, the administrator is under no obligation to treat the nominator any differently from anyone else with an informal claim and may disregard the arrangement altogether. Without a proper paper trail proving the existence of the nominee-nominator relationship, there is little to stop them.
6. Disputes emerge the fastest in the absence of documentation. Other family members, a surviving spouse, or the deceased’s creditors are the most likely to contest an undocumented nominee claim, and without paperwork, they usually have a stronger legal argument.

This is the process every nominee arrangement is quietly exposed to, whether the family realises it or not.

4. Conclusion: A Legal Landscape That Is Starting to Shift

Tanzanian company law currently treats a nominee exactly like any other shareholder, both in life and in death. Tanzania’s probate practice, as it stands today, is not built to ask the question this Article has raised: when an estate’s inventory lists shares registered in the deceased’s name, does anyone check whether those shares were truly the deceased’s own, or whether the deceased was simply holding them as a nominee for someone else?

Currently, the answer is no. An estate inventory records what is registered, not what is truly owned. The gap between the increasingly rigorous beneficial ownership disclosure regime under the Companies Act and its regulations and the probate and estate administration process, which has not yet caught up, is exactly where nominators lose their interests today.

This raises a genuine question worth watching as Tanzania’s beneficial ownership regime matures: should the administrator of an estate be encouraged, as a matter of good practice, to check a company’s beneficial ownership register before finalising an inventory that includes company shares? Should a formally disclosed nominee arrangement carry some evidential weight at the probate stage and not only at the company registration stage? Kenya, the other jurisdiction examined closely in this Article, appears to leave the same question open, which suggests that it is a live area worth watching, although not one that this article can resolve on the strength of two jurisdictions alone.

However, no family or investor needs to wait for that question to be settled. Whether or when the courts or Parliament address the interaction between nominee shareholding, beneficial ownership, and probate, the practical protection available today does not depend on it. It rests entirely on proper estate planning, put in place while everyone involved is still alive: a will that accounts for nominee-held shares, a properly drafted declaration of trust or nominee agreement, and legal advice sought before a dispute arises, not after it arises. Disclosure to a company’s beneficial ownership register is a welcome and important development in terms of transparency and accountability. It is not, and was never meant to be, a substitute for that documentation, which is why engaging a lawyer to put these instruments in place remains the single most effective step a family or investor can take.

Private Wealth Management Desk

Victory Attorneys & Consultants’ Private Wealth Management Desk advises on nominee shareholding, beneficial ownership and estate planning matters of the kind discussed in this Article, including the preparation of trust deeds and nominee agreements and guidance through probate where nominee-held shares are involved.

Disclaimer

This Article is provided for general information only and does not constitute legal advice. Every family’s or investor’s circumstances are different; please speak to our Private Wealth Management Desk before acting, or refraining from acting, on anything in this note.

About Us

Victory Attorneys and Consultants is a leading Tanzanian law firm providing legal, tax and finance advisory services to individuals, families, businesses, investors and institutions. Our Private Wealth Management Desk provides legal advice and practical solutions on estate planning, succession planning, trusts, beneficial ownership, nominee shareholding, corporate structuring, asset protection and probate matters in Tanzania. We assist clients in structuring and protecting their wealth aligned with applicable Tanzanian laws and regulatory requirements. Through our multidisciplinary approach, we help individuals, families and investors make informed decisions that protect their interests today and support the orderly transfer of wealth to future generations.