Winding up of companies in Tanzania: an analysis of law and practice

This work attempts to analyse the law and practice relating to winding up of companies in Tanzania. The main purpose of this work is to examine social interest, legal, economic or political factors which lead to liquidation of companies being cumbersome and procrastinated be they private companies, public owned companies, subsidiary companies or branches of foreign companies. Procedures applicable to these different forms of companies have been examined to get insight into the various problems attendant on winding up and the consequences thereof. The study investigates two hypotheses. The first being that liquidation is procrastinated by the inadequacy of relevant provisions and/or inefficiency of liquidators. Secondly, winding up practice is deficient and cumbersome because of government intervention and/or economic factors, social interest and bureaucracy. The work is divided into an introduction, three chapters and a conclusion. The first chapter provides a brief historical background of winding up, its scope and legal regime. Chapter two gives a chronological summary of the manner and procedures governing compulsory and voluntary winding up. Chapter three reviews four selected case studies, it addresses the winding up practice including the appointment of liquidators, their role, and problems encountered during liquidation. The conclusion sets out several recommendations. The main argument advanced in the study is that, some provisions in the relevant legislation are insufficient and inadequate. There are also other factors which add to the difficulties of the situation and make the liquidation processes procrastinated. Such factors include inefficiency of liquidators, government intervention and bureaucracy. Further, that it is employees who are affected most during the whole winding up procedure. Therefore, there is a need to reform inadequate legal provisions and redress other material shortcomings.