On the 30 June 2022, Finance Act No. 5 of 2022 (Finance Act) was passed into law amending the Companies Act, Cap 212 (Companies Act).
The Finance Act has introduced a new definition to the term “beneficial owner”. The Companies Act now defines a “beneficial owner” to have the same meaning as ascribed to it under the Anti-Money Laundering Act (AMLA). AMLA underwent amendments through Act No. 2 of 2022 and has defined a beneficial owner to mean:
- Any natural person who ultimately owns or controls majority of shares or voting rights or has the ability to appoint or remove the majority of the board; and/or
- Any legal or natural persons having 5% or more direct or indirect shareholding in the Company incorporated or registered in Tanzania.
It follows now that every company incorporated or registered under the Companies Act must keep a register of members and beneficial owners and further deliver a declaration of the beneficial owners to the Registrar of Companies.
Late filing to submit the declaration containing details of the beneficial owners carries a late filing penalty of TZS100,000 to TZS1,000,000. Failure to provide the Registrar of Companies with a declaration containing details of the beneficial owners of a company incorporated or registered in Tanzania is an offence and carries a fine of TZS5 Million to TZS10 Million.