Company Limited by Guarantee Can No Longer Operate As NGOs
March 13, 2021
In summary, (All Companies obtained certificate of compliance to be struck off Register, Registrar has power to strike off companies not complying with the law, Certificate of registration of NGOs valid for 10 years only subject to renewal)

Since 31st October 2018 when the Ministry of Health, Community Development, Gender, Elderly and Children issued a public statement calling among other things the Non-Governmental Organizations(NGOs) registered by other authorities such as BRELA, RITA to apply for a certificate of compliance to the registrar of NGOs there have been controversial opinions from various stake holders.

Among the prevailing issues were the following

(a) What would be the status of first registration prior to obtaining certificate of compliance?

(b) The definition of an NGO was narrow

(c) The Definition of a company was narrow

THE PROPOSED AMENDMENT

The Government has come with the bill (The Written Laws (Miscellaneous Amendment ) Act No.3/2019) aiming at amending various provisions of the Companies Act, NGOs Act, Trustees Incorporation Act, the Societies Act and other relevant laws to address the aforesaid legal challenges.

DEFINITION

Section 2 of Companies Act has been amended and the definition of Company has been well elaborated to mean the company formed under the Companies Act for the purpose of investment, trade and commercial activities.From the wording of that definition it means that a company limited by guarantee carrying out NGOs activities is no longer a company within the meaning of Companies Act.

Furthermore the NGOs Act has been amended by section 2 by strictly excluding all entities registered under other laws such as companies(company limited by guarantee), trust, societies, trade unions, political parties e.t.c

COMPANIES THAT OBTAINED CERTIFICATE OF COMPLIANCE TO BE STRUCK OFF THE REGISTER:

The proposed amendments provide that, all companies, companies limited by guarantee which have obtained the certificate of compliance under section 11 of NGOs Act, shall be struck off the Register of Companies after two months since the coming into force of the proposed law.

POWER TO STRIKE OFF A COMPANY

The proposed amendments have empowered the Registrar of Companies under section 400A of the Companies Act, to strike off any company conducting business contrary to the law. We are of the opinion that through this section most of the companies limited by guarantee conducting NGOs activities without obtaining a Certificate of Compliance under NGOs Act, may be contravening the Companies Act and NGOs Act hence liable to be struck off from the Register of Registrar of Companies.

REGISTRAR OF NGOs AND LAW ENFORCEMENT

The Registrar of NGOs has been empowered to inspect and asses any entity operating as an NGOs. The Registrar has been afforded escort by law enforcement agencies in discharging his duties.

RENEWAL OF CERTIFICATE

The proposed amendments of the NGOs Act direct that the certificate of registration under the Act shall be valid for 10 years subject to renewal. The application for renewal shall be made six months before expiry of the same.

Victory Attorneys International NGOs and Good Governance Unit handles all matters relating to NGOs. For more clarification, contact us at [email protected]

Victory Attorneys & Consultants © 2022

Augustine Dominic Shio

Managing Partner

Augustine Dominic Shio is also known as Mr Shio is a highly sought-after and widely recognized criminal law expert with more than 30 years of experience advising and assisting corporations and individuals charged with white-collar crimes.

Overview

Before founding the firm Mr Shio held several positions in the public sector, he served as a Principal State Attorney at the Attorney General’s Chambers, Legal Advisor at the President’s Office (Commission for Enforcement of the Leadership Code), Director of Legal Services and Complaints at the Ministry of Home Affairs and retired as a Deputy Director of Public Prosecutions at the Directorate of the Public Prosecutions.

Mr Shio is a recipient of the Presidential Medal for his distinctive public services and ethics of the highest order. His distinguished aptitude in handling complex criminal cases, particularly money laundering, economic and organized crimes has enabled the firm to handle high profile criminal cases in Tanzania.

Practice Focus

As the firm’s head of the Financial & Organized Crimes Department, Mr Shio represents corporations and individuals in the telecoms, media & ICT, mining, oil & gas and banking sectors in high profile criminal cases. He has advised and prepared legal compliance models and for large scale agribusiness operators, public listed companies and securities dealers and brokers in line with sector-specific laws.

He possesses vast experience in advising multinational corporations on money laundering and tax evasion throughout the life span of their commercial transactions.

Mr Shio has represented clients in major plea bargaining negotiations at the office of the Director of Public Prosecutions. He is renowned for closing some of the best pleas deals in the country on behalf of many locals and expatriates charged with money laundering, economic and organized crimes and cybercrimes. Additionally, Mr Shio consults and assists criminally charged individuals to secure pre-trail and post-trial bail on serious criminal charges.

Education

Mr Shio holds a Bachelor’s Degree (LL.B Hons) from the University of Dar es Salaam, Certificate in Criminal Justice and Treatment of Offenders from the United Nations Institute (Fuchu, Japan). He is a certified criminal law expert in Money Laundering and Terrorism.

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