Regulation of Shareholders Loan in Tanzania: A lesson from the case of Tanzalasa Limited vs Tractors Limited


Shareholder’s loan is one of the methods of financing business of the company for the company to meet its working capital obligations and other investment plans, however it must be noted that, the shareholder’s loan is not the same as a loan secured from registered financial institution. It is a requirement that in a shareholder’s loan reasonable interest has to be charged. The justifications for this requirement is for good economic and fiscal reason taking into account the fact that Lending of Monies is a regulated business in Tanzania and it is conducted by registered Financial Institutions. This brief article sheds light on the shareholder’s loan especially the requirement of reasonability of interest.

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