A number of documents are generated throughout the operation of the company or a business. Due to limited storage capacity one can be forced to dispose some documents which are no longer useful.

In deciding whether or not to dispose a document it is important to consider the retention period specified in the relevant provisions of the law, and the manner in which it can be disposed of.

The retention period and the manner of disposal vary depending on the legal requirements provided by the relevant regulator through its regulations affected by the document in question. For instance the regulator could be the Tanzania Revenue Authority (TRA), or Tanzania Communication Regulatory Authority (TCRA) or the Business Registration and Licensing Agency (BRELA).

For company’s documents which are required to be maintained by the registrar of companies, the Companies Act regulates the retention period and the manner of disposing such documents through its regulation, the Companies (Retention and Disposal of Companies Documents) Regulations, 2023 (the Regulation).

What kind of documents should you retain?

All documents which reflect the affairs and the financial position of the company must be retained, at least for a specified period of time. The Regulations has specifically listed some of these documents in its first schedule which includes the memorandum and articles of association and amendments; the consolidated form; annual returns; particulars of beneficial owner; notice of change of address; appointment or termination of a director or secretary; etc.

It is important to note that the list is not exhaustive. If there is any other documents which the company is required to keep by any law it must be retained for a prescribed period of time.

The documents which must be retained must be original documents either in paper or electronic form.

Why should you retain a document?

Why in the first place, should you retain the documents which are no longer useful? There are a number of reasons why proper records management is important even regarding those documents that are no long useful. Some of the reasons might be:

  • At some point the company might be required to submit the documents for the purpose of inspection or evidence especially those documents which are required to be retained as a legal requirement;
  • In order to explain past transactions and the financial position of the company;
  • To give a fair view of the profit or loss arising out of the operations of the business at a certain period of time;
  • To enable proper auditing of documents;
  • To protect public members in their dealing with the company who usually depends on the information furnished to the relevant authority regarding the company’s affairs and financial positions;
  • To enable members of the public, potential investors and creditors to make rational and informed decisions regarding a company based on the retained company documents.

For how long should you retain a document?

The company is required to ensure that the documents that are required to be kept are properly maintained and are available for a specified duration.

The period the company is required to retain a document vary depending on the type of the document in question. For instance documents such as memorandum and articles of association, consolidated form, annual returns, annual accounts or financial statements etc. –must be retained for 10 years. For documents such as particulars of beneficial owner, notice of change of address, particulars of mortgage or charge, particulars of registration of a charge etc. –must be retained for 5 years.

You can find more details about the type of document and the retention period in the first schedule to the Regulations.

The time for retention period starts to reckon when the document is no longer useful.

In certain circumstances, the retention period of the document can be prolonged. One of such circumstances is provided under regulation 5(3) of the Regulations, whereby the Registrar of companies can notify any company to retain a document beyond the prescribed period. Also documents which may be required for investigation or pending legal proceeding or claims cannot be disposed until completion of the relevant proceeding.

What is the procedure of disposing a document?

The company may dispose its document after the expiration of the retention period. A decision to dispose a document will require a board resolution or approval of the administrator, receiver or liquidator depending on the circumstances.

You’re required to enter the particulars of all documents to be disposed in a prescribed form to be submitted to the registrar of companies. The company secretary or director or other relevant officer of the company should be present at the time of disposal and should sign the disposal form.

The disposal form should be submitted to the registrar within 28 days from the date of disposal

What are the consequences of destroying a document before expiry of a retention period?

There are many consequences of poor management of company documents. Important documents maybe lost or destroyed due to poor record keeping. Usually most documents are careless handled after their intended usage. That’s why it might be helpful to have a policy of retention of documents.

Disposing of documents before the expiration of the retention period is a criminal offence which can attract fine of not less than Tshs. 1 Million but not more than Tshs. 10 Million.

Failure to perform certain actions like filing the disposal form in time or disposing documents required for investigation can also attract administrative fine in addition.

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