The Transfer of Businesses (Protection of Creditors) Act

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CHAPTER 327
THE TRANSFER OF BUSINESSES
(PROTECTION OF CREDITORS) ACT
[PRINCIPAL LEGISLATION]
Arrangement of Sections
Section Title
1. Short title.
2. Interpretation.
3. Liability of transferees of businesses.
4. Contents of notices of intended transfers.
5. Right of transferee to indemnity.
6. Contractual liability not affected.
7. Registrar General may prescribe newspapers.
8. Saving.

ended transfers.
5. Right of transferee to indemnity.
6. Contractual liability not affected.
7. Registrar General may prescribe newspapers.
8. Saving.

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1. This Act may be cited as the Transfer of Businesses
(Protection of Creditors) Act. 2. In this Act, unless the context otherwise requires-
“debt” includes any tax, levy, fee or penalty due to the
Government under any written law. [s.

2. In this Act, unless the context otherwise requires-
“debt” includes any tax, levy, fee or penalty due to the
Government under any written law. [s.

1A]
3.–(1) Subject to the provisions of section 7, every person who
after the date of the coming into operation of this Act, acquires-
(a) the goodwill; or
(b) the whole or substantially the whole of the property,
of any trading or manufacturing business or any business
of a like nature shall, notwithstanding any agreement to the
contrary, be liable for all the debts and obligations for which
the transferor thereof is liable in respect of that business at the
date of the transfer unless notice of the intended transfer has
been published in accordance with the provisions of section
4 not less than two months nor more than six months before
the date when the transfer is to take effect:
Provided that, a person who has paid in good faith and
without preference in discharge or partial discharge of
debts and obligations for which he became liable under the
Short title
Interpretation
Act No. 7 of 1976 s. 21
Liability of
transferees of
businesses
Act No. 7 of 1976 s. 22
CHAPTER 327
THE TRANSFER OF BUSINESSES
(PROTECTION OF CREDITORS) ACT
An Act to protect creditors on the transfer of businesses. [28th February, 1958]
Ord. No. 5 of 1958
[R.L. Cap. 398]
Act No. 7 of 1976

F CREDITORS) ACT
An Act to protect creditors on the transfer of businesses. [28th February, 1958]
Ord. No. 5 of 1958
[R.L. Cap. 398]
Act No. 7 of 1976

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.393
THE TRANSFER OF BUSINESSES (PROTECTION OF CREDITORS) ACT [CAP. 327 R.E. 2023]
provisions of this Act and for which he would not otherwise
have been liable, an amount equal to the value at the date of
the transfer of the goodwill and property acquired by him shall
not be liable further or otherwise under this Act:
And provided further that, an action shall not be instituted
to recover any debt from or enforce any obligation against any
person liable therefore under the provisions of this Act but
not otherwise, more than twelve months after the date of the
transfer upon which the liability arose. (2) The provisions of this section shall extend and apply in
relation to any income tax or other tax due or which may, on
assessment or reassessment, become due from the transferor
in respect of his income from the business earned prior to the
date of the transfer, whether or not at the date of the transfer
the amount of such tax had been assessed or ascertained. [s.

ness earned prior to the
date of the transfer, whether or not at the date of the transfer
the amount of such tax had been assessed or ascertained. [s.

2]
4.–(1) The notice referred to in section 3 shall contain the
following particulars:
(a) the full name and the residential and postal addresses
of the transferor;
(b) the nature of the business and the name or style under
which, and the full address at which, the business has
been carried on;
(c) the nature of the transaction, whether sale, exchange or
otherwise and the extent thereof;
(d) the date when the transfer is intended to take effect;
(e) the full name and the residential and postal addresses
of the transferee;
(f) the full address where, and the name or style
under which, the transferee intends to carry on the
business; and
(g) a statement as to whether the transferee is assuming all
or any of the liabilities of the transferor. Contents of
notices of
intended transfers

nd
(g) a statement as to whether the transferee is assuming all
or any of the liabilities of the transferor. Contents of
notices of
intended transfers

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE TRANSFER OF BUSINESSES (PROTECTION OF CREDITORS) ACT [CAP. 327 R.E. 2023]
394
(2) Every such notice shall be signed by both the transferor
and the transferee and shall be published in the Gazette and in
such newspaper or newspapers as may be prescribed. (3) The production of the Gazette containing any such notice
shall be prima facie evidence as against both the transferor and
the transferee of the statements contained in the notice. [s. 3]
5. The transferee of the goodwill or the whole or substantially
the whole of the property of a business shall be entitled to be
indemnified by the transferor as regards all amounts for which
the transferee is made liable under this Act and for which he
would not otherwise be liable and the amount of any such
indemnity may be recovered by civil suit. [s. 4]
6. This Act shall not relieve or be deemed to relieve either the
transferor or the transferee of the goodwill or the whole or
substantially the whole of the property of a business from any
liability to which he would otherwise be subject. [s. 5]
7.

he goodwill or the whole or
substantially the whole of the property of a business from any
liability to which he would otherwise be subject. [s. 5]
7.

The Registrar General may, by notice in the Gazette,
prescribe the newspaper or newspapers in which notices of
intended transfers shall be published under section 4. [s. 6]
8. This Act shall not affect any person acquiring the goodwill
or the whole or substantially the whole of the property of any
business-
(a) from the official receiver or any trustee in bankruptcy;
(b) from the liquidator of any company;
(c) from an executor or administrator; or
(d) by operation of law. [s. 7]
Right of
transferee to
indemnity
Contractual
liability not
affected
Registrar General
may prescribe
newspapers
Saving