Rescuing a Business in Financial Difficulties: Modern Trends and Tanzania’s Legal Perspective
Benhaji Shabaan* (The author of this article is a member of academic staff of the Open University of Tanzania and an Advocate of the High Court and Subordinate Courts thereto save the Primary Court )
Download Article | Published On 01/07/2005

Abstract

The modem insolvency laws are increasingly incorporating rescue procedures, which provide for rescue of insolvent or financially distressed companies. In its modern sense, insolvency laws are not merely confined to liquidation but also address the possibilities of having an insolvent or financially distressed company rescued. This trend is attributable to the fact that in the modem times. The functioning company embraces more interests economically than the financial interests of creditors and owners. The paper explores the Tanzania's legislative trends as regards to the nature and structure of corporate rescue provisions in light of the modern trends worldwide. It also looks at the need and relevance of rescue provisions in Tanzania. The paper observes that unlike the Companies Ordinance, a colonial peace of legislation inherited by the independence government, the new Companies Act, 2000 envisages a positive direction towards the modem corporate rescue approaches. It is however too early to comment precisely on the practicability of the Act as it is even yet to be brought into force. The paper argues that, following the liberalization drive and the judicial trends pointing to the acceptance of the rescue culture, institutionalization of the rescue regime in Tanzania's insolvency legal framework is much awaited and needed

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