THIS IS IMPORTANT : Business Names Act a better tool for the registration of business names

Hawa Sinare, the Columnist
All the time we had a law, the Business Names Act CAP 213 as amended, better suited to the registration of business names instead of the complicated Business Activities Registration Act of 2007 which was ill suited to our legal system and could not be implemented reasonably. Thanks God the Act has been dusted and improved.

The Business Names Act was amended by the Business Laws (Miscellaneous Amendments) Act No. 3 of 2012 that amended 3 other business laws including the Companies Act No. 12 of 2002 (Companies Act). The amendments are good. Only that the law is about the registration of business names. Why the new title of the Act dropped the term “registration” is unclear but its deletion is not a major flaw. The only wish is that the amendments would have provided for limited liability partnerships which would have made it easier for firms to expand beyond 20 partners.

For- profit business formations are either under the Business Names Act as amended or the Companies Act as amended. It would have been better if amendments to both of the Acts were analyzed in this article. The introduction of single individual shareholder company has huge implications to personal liability to the shareholder as opposed to liability being limited by shares. However, space allows me to analyze only the Business Names Act. Next week we will analyze the amendments to the Companies Act.

The Business Names Act

The Act is a law essentially for the registration of business names defined by the Act to include any name or style under which any business is carried out on, whether in partnership or otherwise. This is the law under which a sole trader, a single individual, two or more individuals or corporations who have entered into partnership with one another with a view to carry on business for profit may register the names by which they wish to carry on their businesses. An abbreviation of a name should be registered under the Act. The Act applies also to nominees, where a firm, individual or corporation having a place of business within Tanzania carries on the business wholly or partially as nominees or trustees of or for another person or persons or another corporation or acts as general agent for any foreign firm, the first mentioned firm, individual or corporation must register in the manner provided in the Act.

New amendments to the definitions of the term” business “include “every trade and profession”. A new definition of the term “carrying on business’ has been added to include “establishing a place of business and soliciting or procuring any order from any person in Tanzania” have the effect of widening the scope of business activities.

Before the changes a person had to deliver or send by post the particulars required under the Act in order to be registered. Now one can send the particulars, by email or fax in addition to by delivery or by post and other modern means of correspondence. The particulars to be provided as set out in the Act remain practical.

The time within which any person carrying on business must register the business name is 21 days from the commencement date of the business (section 8 of the Act) instead of 28 days before the amendments meaning that one could commence business and establish a place of business before registration provided registration is obtained within 21 days.

Amendments to subsection 3 of section 9 of the Act may not have been intended. The section provides for a 5 days, instead of 28 days within which an approved name may be reserved for the applicant. Beyond that period the Registrar would be at liberty to allow the name to be used by another person. Accepted company names are reserved for 30 days up to a maximum of 60 days! The Act should have retained the 28 days.

Some of the amendments were consequential to update fees charged, the means of communication and reference to “Her Majesty” and the “Royal Family” were deleted and replaced by the term “Government”. That said the drafting of the law and the content are still good and practical despite the fact that the law is a 1930 law that has been amended only 3 times before 2012.
Source: The Citizen, reported from Dar es Salaam
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