It is a well-established principle of company law that a company is a separate legal entity from its shareholders. Consequently, assets owned by a company do not constitute the personal property of its shareholders and cannot be included in a shareholder’s estate upon death.

This principle was recently reaffirmed by the Court of Appeal of Tanzania in Civil Application No. 1591 of 2024, St. Mary's International Academy Limited and Kellen Rose Rwakatare Kuntu (as Administratrix) v. Tibe Kenneth Rwakatare, Humphrey Kaulila Kenneth, and Mutta Robert Rwakatare (as Administrators).

In this case, the deceased, Rev. Dr. Getrude Pangalile Rwakatare, died intestate. During her lifetime, she was a shareholder of St. Mary's International Academy Limited (the 1st Applicant), a limited liability company. Following her death, the joint administrators of her estate, including the 2nd Applicant and the three Respondents, prepared and filed an inventory and final accounts listing various properties for distribution as part of the deceased’s estate.

The 2nd Applicant objected to the inclusion of several properties in the inventory, arguing that they were not owned by the deceased personally but by the 1st Applicant company. The disputed properties included:
• Plots Nos. 109–137, Block “A”, Tabata (Item 22);
• Plots Nos. 673, 674, 675, 676, and 677, Block 46, Kijitonyama (Item 38(g)); and
• Plot No. 11, Mbezi Beach, Dar es Salaam (Item 20).

The High Court dismissed the objection, reasoning that since no third party had asserted ownership of the properties and the deceased was a shareholder of the company, the properties formed part of her estate.

Aggrieved by the decision, the 1st and 2nd Applicants filed an application for revision before the Court of Appeal. The Court of Appeal allowed the application and held, among other things, that the High Court had erred in treating company assets as though they were the personal property of the deceased.

The Court emphasized that a company possesses a legal personality distinct from its shareholders. As a result, property registered in the name of a company belongs to the company itself and not to its shareholders, regardless of the extent of their shareholding. Upon the death of a shareholder, what passes to the estate are the deceased’s shares in the company, not the company’s underlying assets.

This decision serves as an important reminder of the doctrine of separate legal personality and reinforces the distinction between ownership of shares and ownership of corporate assets.