Micro-enterprise is important to surviving or escaping poverty in developing country cities. Micro-entrepreneurs, informal in terms of business and commercial law, are stigmatized, rendered liable to legal enforcement, their access to credit is limited, and the growth of their businesses is impeded. As intensive international efforts today address business informality among larger enterprises, the business-law informality of micro-enterprise has begun to attract scholarly and professional attention. Drawing on a desk study and field studies in Tanzania in 2007 and 2011, and focusing on street vendors, this paper investigates the potential of proposed Legal Empowerment reforms to overcome barriers and disincentives to micro-business formalisation. The proposed reforms could go a long way towards addressing these barriers but, echoing criticisms of the Commission for Legal Empowerment of the Poor, the reform process has only partially addressed the political obstacles to the acceptance of the reforms and the micro-entrepreneurs they are expected to legitimate.