The company is a living legal entity like a natural person. Natural person can die from various causes such as diseases and accidents. A company cannot die like an ordinary human being due to diseases or accidents. Winding up of a company is a process that aims to end the life of the company. In simple language winding-up is the death-knell of a company. The net assets of a company (if any) will be distributed among the members as the successors
In Tanzania the winding up a company may be either by court or voluntary arrangement.

Winding Up by Court

The court with jurisdiction to winding up any company registered in Tanzania is the High court.
A company may be wound up by the court if any one of the following circumstances occurs: -

i. The company has by special resolution resolved that the company be wound up by the court

ii. The company does not commerce its business within a year from its incorporation or suspend its business for whole year

iii. The number of members fall below two (2)

iv. The company is unable to pay its debt

v. The court is of the opinion that it is just and equitable that the company should be wound up.

Winding up by Court for a Company incorporated out side Tanzania carrying business in Tanzania.
A company incorporated outside Tanzania and carrying on business in Tanzania may be wound up in Tanzania when

i. winding up proceedings have been commenced in respect of it in the country of its incorporation or

ii. in any other country in which it has established a place of business

Who can file Winding Up Petition

An application to the court for the winding up of a company is made by petition either by

Attorney General (AG)

- If it appears to the AG that the company’s business is being conducted with intent to defraud its creditor or creditors or for fraudulent or unlawful purpose or in a manner oppressive of any part of its member, or that it was formed for any fraudulent or unlawful purpose.

- For public interest if there is any report or information it appears that any civil proceedings ought to be brought by any body corporate, the AG may him self bring proceedings in the name of body corporate.

by the company it self

any creditor or creditors

contributory or contributories

an administrators

Definition of inability to Pay Debts

If any of the following things occur, the company will be considered to have failed to pay its debts, so the creditor or creditors may petition for winding ups: -

if a indebted in a sum exceeding fifty thousand shillings or such other amount as may from time to time be prescribed in regulations made by the Minister- a written demand requiring the company to pay the sum so due and the company has for twenty-one days thereafter neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor

if execution or other process issued on a judgment, decree or order of any court in favour of a creditor of the company is returned unsatisfied in whole or in part

if it is proved to the satisfaction of the court that the company is unable to pay its debts as they fall due

if it is proved to the satisfaction of the court that the value of the company's assets is less than the amount of its liabilities, taking into account the contingent and prospective liabilities of the company

Commencement of Winding up by court

There are two circumstances

on passing of resolution for voluntary winding up by the company- this is when the company initiates winding ups itself

At the time of presentation of the petition for winding up

Consequence for Winding up Order.

No other proceedings shall be proceeded with or commenced against the company except by leave of the court and subject to such terms as the court may impose.

Voluntary Winding up

Circumstances for Voluntary Winding Up

Expiration of time- this occurs when the period, if any, fixed for the duration of the company by the articles expires, or the event, if any, occurs, on the occurrence of which the articles provide that the company is to be dissolved, and the company in general meeting has passed a resolution requiring the company to be wound up voluntarily.

if the company resolves by special resolution that the company be wound up voluntarily

if the company resolves by special resolution to the effect that it cannot by reason of its liabilities continue its business, and that it is advisable to wind up.

Requirement of Meeting

The company is required to conduct general meeting for the purpose of winding up. In the meeting the company will: -

Agree and pass resolution for voluntary winding up

Appoint one or more liquidators for the purpose of winding up the affairs and distributing the assets of the company

Fix the remuneration of the liquidators

Notice of resolution for voluntary Winding Up

Upon adopting resolution to wound up a company voluntary, the notice must be issued to the public within 14 days after the passing of the resolution by advertisement in the Government Gazette and in one of newspaper widely circulating in Tanzania. The notice will be accompanied by notice of appointed liquidator (s)
Such notice together with the resolution to winding up and tax clearance certificate must be forwarded to the Registrar of company within 14 days of the resolution passed.

Commencement of Voluntary Winding Up

A voluntary winding up shall be deemed to commence at the time of the passing of the resolution for voluntary winding up. Any transfer of shares not being a transfer made to or with sanction of the liquidator and any alteration in the status of the members of the company made after the commencement of a voluntary winding up shall be void.

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