SUBJECT: BUSINESS LAW AND ETHICS

COURSE: BACHELOR IN BUSINESS ADMINISTRATION 2ND YEAR

STREAM: A
LECTURER: MBATA USANTE

GROUP ASSIGNMENT -BBA II A

FIRST NAME MIDDLE NAME LAST NAME REGISTRATION
1) DANEL E MYENDA 03.3951.01.01.2022

2) RASHID M RASHIDI 03.0888.01.01.2022

3) RAHMA S BAKARI 03.1281.01.01.2022

4) SALUM S MCHELA 03.1786.01.01.2022

5) PAULA M LEBALWA 03.3531.01.01.2022

6) JULIAN C NDANGA 03.2695.01.01.2022

7) ASHERI C NYEKELE 03.9605.01.01.2022

8) RASHIDI S MSANGI 03.1654.01.01.2022

9) OWEN C MATERU 03.4152.01.01.2022

10) HAFSA J KAWA 03.6087.01.01.2022

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QUESTION. A

 HESABU consultants (‘the firm’) on payment of their audit fees by SAKA, would likely
be considered unsecured claims in SAKA’S bankruptcy proceedings. As such they may
not receive full or immediate payment for their outstanding fee.

 Therefore, the court will provide the order and manner in which unsecured creditors are
paid from available assets

QUESTION. B
 the firm on the legality of the directors of MOTA Ltd and KUPWA to receive remuneration
from the partnership business. Under the Law of Contract Act, Cap 345 R.E. 2002, section
194 explains carefully the “conduct of business, mutual rights of partners and
liabilities” under (d) a partner is not entitled to receive remuneration for taking part in the
conduct of the business Concluding that the directors of MOTA Ltd and KUPWA will not
receive remuneration from the partnership business.

 The one who has a right to take part in a management of the partnership business can be
seen Under the Law of Contract Act, Cap 345 R.E. 2002 section 194 explains carefully the
“conduct of business, mutual rights of partners and liabilities” under (a) every partner
has a right to take part in the management of the partnership business concluding that
MOTA Ltd and KUPWA partners are all involved in the management of the partnership
business

 Dr. Zongo’s self-made rules are likely to be considered invalid as they violated the rights
of other partners, the other partners may take these rules and challenge them to recover any
violated rights that have been improperly addressed

QUESTION. C

 The legal status of the contracts of employment between KUPWA and Kali and Tuwe, is
Invalid /void contract because under the company act which clearly explains the winding
process the companies act, 2002.section 425 states that once accompany is being wound
up, any transfer of shares, alteration in status of member, or any creation of any charge on
the business’s property withought the approval of court is void

 contracts of employment between KUPWA and (Kali and Tuwe), in early 2019 they
entered into contracts of employment with two persons (Kali and Tuwe), but by the court

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 in October, 2018 KUPWA was already compulsorily wound up (liquidated). Meaning that
when a business is wound up, its power is limited to action necessary for beneficial wind
up of its affair.

QUESTION. D

 The legality can be stated under Section 427 of company’s act,2002 provides that” after a
wind up order has been made, no suit or other legal proceeding shall be proceeded
with or commenced against the business except by the leave of court.” Concluding that
all the post windup contracts made between KUPWA and Kali and Tuwe were void
contracts

 The legality of MOTA Ltd in refusing to work with Kali and Tuwe depends on the basis
and the consequences of such refusal. MOTA Ltd has a valid reason to refuse to work with
Kali and Tuwe, such as breach of contract, fraud, negligence, or misconduct, then MOTA
Ltd may be justified in terminating or suspending the relationship with Kali and Tuwe.
Leading kali and Tuwe with an advantage according to “Misrepresentation” defined by
the Law of Contract Act, Cap 345 R.E. 2002, section 18(b) which state that, “any breach
of duty which, without an intent to deceive, gains an advantage to the person
committing it, or anyone claiming under him, by misleading another to his prejudice,
or to the prejudice of anyone claiming under him”.

QUESTION. E

 There was no legal remedy available to Mr. SAKA against MOTA Ltd after refusing to
take over liabilities of SAKA’s sole proprietorship business, since MOTA Ltd is a separate
legal entity and it is not obligated to assume the debts of another company, regardless there
is same directors and shareholders

QUESTION. F

REMEDIES

Possible Contractual Remedies for Iguguno District Council

1) Termination of the Contract:

Iguguno District Council can choose to terminate the contract with Mr. SAKA company if they
are unable to perform their contractual obligations. The termination should be done in accordance

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with the contract terms and conditions. Upon termination, the Council may seek compensation for
any losses incurred as a result of the termination.

2) Damages:
The Council can claim damages from Mr. SAKA company for any losses incurred as a direct
result of the breach of contract. Damages can be compensatory, which are meant to put the injured
party in the position they would have been in had the contract been performed, or they can be
punitive, which are intended to penalize the breaching party for their wrongful actions.

3) Specific Performance:
If the contract was for a unique or irreplaceable product or service, such as the supply of a specific
type of fertilizer, Iguguno District Council may seek an order of specific performance. This remedy
requires the breaching party, in this case, Mr. SAKA company, to perform their contractual
obligations. However, this remedy is generally not granted if damages would be an adequate
remedy for the breach.

4) Settlement Agreements:
Another option for Iguguno District Council is to negotiate a settlement agreement with Mr. SAKA
company. This can involve the parties reaching a mutually agreeable resolution to the breach,
which may include modified terms, extensions, or partial performance.

5) Mediation or Arbitration:
In some cases, it may be more appropriate for the parties to resolve their dispute through
alternative dispute resolution methods such as mediation or arbitration. These methods can help
the parties come to a mutually acceptable resolution without the need for formal litigation.

In conclusion, Iguguno District Council has several contractual remedies available to them after
Mr. SAKA company’s failure to perform the contract. These remedies include termination,
damages, specific performance, settlement agreements, and alternative dispute resolution
methods. The choice of remedy will depend on the specific circumstances and the preferences of
the affected party.

QUESTION. G
 Given that the creditors of KUPWA remained unpaid after winding up of the company,
the creditors may have certain rights against the shareholders of KUPWA, if KUPWA
assets are insufficient to cover the liabilities creditors may have the right to seek repayment
from the shareholders of KUPWA, particularly if it can be shown that shareholders have
acted frequently, unfairly, or in a manner that has caused harm to creditors
 Seeking contribution from the shareholders of KUPWA if it is stated that they have
received a benefit from company’s assets that was not fairly distributed among the
shareholders of KUPWA

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QUESTION. H

I. COMPANY’S ARTICLE OF INCORPORATION OR CERTIFICATE OF

INCORPORATION

 Before entering a contract with any company it is important to review the

company’s articles of incorporation or certificate of incorporation, since this
document outlines the company legal structure, purpose, and the
shareholder rights, providing valuable information about the company’s
governance and stability. This is so important when you want to enter into
contract with a company
II. MEMORANDUM AND ARTICLES OF ASSOCIATION

 The company memorandum and articles of association sometimes called

company’s bylaws. are crucial documents that outlines the internal rules and
procedures governing the company. These bylaws include information
about the company’s management structures, decision making process and
shareholders rights .by reviewing this document as an outsider can help to
gain insight into the company’s operational efficiency and decision making
capabilities

III. ANNUAL FINANCIAL REPORTS OR AUDITED FINANCIAL STATEMENTS

 As an outsider before entering the contract with a company it is important

to review the company’s annual financial reports or audited financial
statements. These documents provide a comprehensive overview of the
company’s financial health, including its income, expenses, assets and
liabilities. Analyzing these financial statements can help an outsider assess
the company’s financial stability, growth potential and ability to fulfill its
contractual obligation

QUESTION. I

1. Ensure Proper Registration and Compliance:

One of the primary steps is to ensure that the company is duly registered with the relevant
authorities in Tanzania, such as the Business Registration and Licensing Authority (BRELA). This
will involve providing accurate and up-to-date information about the company, its shareholders,

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and directors. Regularly reviewing and updating this information will help maintain compliance
with Tanzanian laws and regulations.

2. Establish a Strong Shareholder Base:

Building a diverse and strong shareholder base will help in attracting investments, ensuring
financial stability, and promoting long-term growth for the company. This can be achieved by
reaching out to potential investors, both locally and internationally, and offering them attractive
investment opportunities. Transparent communication with shareholders, regular reporting, and
maintaining good relations with them will also contribute to shareholder satisfaction.

3. Appoint Competent Directors:

The company should appoint competent and experienced directors who have a deep understanding
of the Tanzanian business environment and can contribute to the company’s growth. Directors
should possess strong leadership skills, ethical values, and a commitment to upholding the
company’s best interests. Regular evaluation of the performance of directors and providing them
with opportunities for professional development will help ensure their effectiveness in their roles.

4. Adhere to Corporate Governance Best Practices:

Establishing and maintaining robust corporate governance practices will help protect the interests
of shareholders and other stakeholders. This includes having an effective board of directors, clear
separation of powers among shareholders, directors, and management, and implementing
transparent decision-making processes.

5. Monitor and Evaluate Performance:

Regularly monitoring and evaluating the company’s performance against its goals and objectives
will help identify areas of improvement and ensure that the company is on the right track. This can
be done through internal audits, financial analysis, and performance metrics.

6. Engage with Stakeholders:

Building strong relationships with various stakeholders, including employees, suppliers,
customers, and the local community, will help in achieving long-term success. This involves
engaging in open and transparent communication, addressing concerns, and providing support
where needed.