The transfer of shares of any member in a company must be in accordance with the manner provided by the articles of association and the Companies Act. Any invitation to the public to subscribe for any shares or debenture of the public is prohibited for the private limited company.
However, a company cannot register a transfer of shares unless a duly stamped proper instrument of transfer is delivered to the company.
Under the Companies Act and if applicable under the articles of association, a company can refuse to register a transfer of any shares and must send to the transferee notice of the refusal within 60 days after the date on which the transfer was submitted to the company.
The directors can, in their absolute discretion and without giving a reason, decline to register the transfer of any share, whether or not it is a fully paid share.
Shares of a deceased shareholder can be transferred by his or her personal representative, and this is as valid as if the personal representative had been a member at the time of transfer.
To be effective a share transfer requires a certificate issued by the Tanzania Revenue Authority (TRA), certifying that all taxes (including income tax in respect of capital gains) have been paid for the transfer or that the taxes do not apply. The income tax in respect of the capital gains must be paid within 30 days or any other period determined by the TRA. A draft amendment to the law at the time of writing proposes that a company whose shares have been transferred or transmitted must notify the BRELA Registrar within 28 days from the date of transfer or transmission.
Where the underlying ownership (direct or indirect) of a Tanzanian company changes more than 50% at any time during the previous three years, the company will be deemed to have disposed of all its assets and liabilities, at current market value. The disposal will trigger a deemed capital gains tax liability on any deemed gain. Additionally, a company whose underlying ownership changes by more than 50% is required to report to the Commissioner for Income Tax before and after such change has occurred.
Some sectoral approvals and/or notifications for share transfers may be required from regulatory bodies that regulate the type of business of the company.