Company registration process in Nepal may be very confusing if you don’t understand the basics of the company and the important points about company registration. So, we are sharing all the essential things anyone should be aware of while starting the company registration process or planning to start a business soon.
Companies or businesses are registered under the Companies Act, 2006. And, the Office of Company Registrar (OCR) has the authority to decide everything related to the company registration. If you are unaware of the procedures of registering a business in Nepal but are willing to set up one soon, we have prepared a step-by-step guide on how to register a company in Nepal. Also, this article contains a comprehensive list of generally asked questions about company registration in Nepal and a detailed guide on how to check the availability of a company name.
1. Decide and check the proposed name of your company
Firstly, You have to reserve their company name at the company registration office (OCR) before processing for business registration in Nepal. The name should be unique and should not match already registered company names. You can check the availability of the proposed name at the company registration office’s website (ocr.gov.np) . Please keep in mind adding “New”, “Shree”, “Naya” or any pronoun like mero, hamro, etc to an already registered name will not make the name unique. Once you decide on the name, you can apply that name to the OCR website. It generally takes around 5 days to approve or reject the name.
How to check company name availability in Nepal? (Name Availability Check at OCR)
To check a company name availability at the company registration office, you must first create a user. Creating a user at OCR website is pretty straightforward. You have to fill in your details to register as a user which include your Name, Phone Number, email address, and Citizenship number. Please make sure to enter a valid and working email ID because the company registration office’s portal will send your password there. Also, you can’t change the email later without visiting the company registration office. After you click on “Start Company” on the OCR website, the page as shown below appears where you have to fill in every detail.
Once you create a user, you can see an option to Check/Reserve Company Name. You can Enter your name there and see if a similar name is already registered or not. While checking, please make sure to check with alternative spellings and slight variations. (Eg: Ma Lakshmi, Maa Lakshmi, Ma Laxmi, etc)
2. Prepare documents for company registration
After approval of the name, you need to prepare all the necessary documents to be submitted to the company registration office (OCR).
Documents to prepare/submit during the company registration process in Nepal:
- Application form (Sample of the application form)
- MOA (Prabandhapatra)
- AOA (Niyemawali)
- Notarized copy of citizenship certificate of all shareholders
Please note that some businesses might need preapproval from concerned authorities, if your business falls in that category, you need to submit the papers from the licensing or approving authorities as well. A few examples are Security companies, Distillery, Crusher, etc.
3. Upload all the documents in your OCR dashboard
After preparing all the documents, you should scan them properly and upload them onto the OCR website’s user dashboard area.
Details procedure of uploading the documents on the OCR user dashboard area:
- Once your requested company name is approved, you can have to fill out the company registration form by logging into the site and using your user ID and password.
- After you log into the homepage, you will see the link to the registration form. Click that link, and fill in company details, company address details, capital details, and company shareholders’ details thoroughly.
- After that, upload all the scanned copies of the required documents in the document details section.
- After doing so, click the ‘Save’ button if you are sure of the details, or click the ‘Preview’ button if you wish to preview all the details. Then, click ‘Submit’ if you are sure of all the details you have provided.
Once you submit the company registration form, a page on which you can view all the detailed information such as revenue to be paid, temporary application ID, and confirmation message of the registration will open. With this, an attachment of the company registration details will also be sent to your email address.
Then, whether your application is rejected or approved, you will be notified via mail or in your lodgement section by the company registration office.
After your submitted application is approved, for further verification of the registration process, you will be asked to visit the OCR with the original articles of association and memorandum of association. Also, you need to pay the revenue as per your authorized capital. You can pay the rajaswa amount online via connectIPS.
Now, the OCR will verify all the registration processes.
Then, the OCR will issue a certificate of company incorporation and other documents that include a letter to the TAX office and a letter with a reserved PAN number.
After the company is registered with the company registration office, investors need to register themselves for tax (VAT/PAN) at the concerned Inland Revenue Office (Tax office).
4. Remember these key points while registering a company
Please mind the following things during the registration process
- The article of associations and memorandum of associations should be either in Nepali paper (Lokta paper) or other durable paper and should be typed on one side of the paper only. Make sure to use at least 80gsm paper to print those documents.
- It should be written in clear Nepali language. You can use any font but they should be consistent throughout the document.
- All shareholders should sign at the top and bottom of each page of the article of association and the memorandum of association. In the last chapter of the article of association and memorandum of association, the full names, and addresses of the founder shareholders, the number of shares agreed to be taken, and the signatures, as well as fingerprints, below the signature of each of the founders, should be clearly mentioned. It is a must to have the full name, address, and signature of each witness of the founder shareholders.
- At least one of the founder shareholders must be present in person at the shareholder’s office to register a company, or should provide an authorization letter signed by all shareholders if sending someone on their behalf to complete the registration process.
- You need to register your PAN/VAT at the IRD office of the same ward as you mention on AOA and MOA, so decide that properly.
Company Registrar’s Office Information Q&A (Company Registration Process FAQs)
1) Should the company be renewed or not?
The company does not have to be renewed in the office of the Registrar of Companies. However, if the company has registered the industry/business in any other body or has obtained a license/permission, it is necessary to contact such a body and renew the registration/license/permission as per the rules there. But the companies have to submit the annual statement and other specified details in the prescribed time to the office of the Registrar of Companies through an online system.
2) Does the company have to pay an annual fee or any fee?
The company does not have to pay any fee to the Registrar of Companies if the details are submitted on time. However, if the details are not submitted within the stipulated time, there will be a penalty (delay fee), and the later the details are submitted, the more the penalty amount will increase.
However, according to the prevailing law, tax and prescribed details should be submitted to the Inland Revenue Office.
3) What are the objectives of the company?
The purpose of the company can be arranged in the management letter as per the need. You can specify the objectives while registering a company. A company can have multiple objectives as well.
4) Should the company open a partnership or a private firm?
No, a company cannot open a firm. However, a company can open another company or invest in another company as a shareholder.
5) What should be the face value of the shares?
The face value of the shares of the private company shall be as prescribed in the rules of the company. The face value of the shares of a public company should be divisible by 10 (eg: Rs. 10, 20, 100 , 150 etc)
6) When should the company issue a share certificate to the shareholder?
Within 2 months of the distribution of shares. (But in the case of listed public companies, it has to be sent to the shareholder’s account within the rules/policy prescribed by Nepal Securities Board)
7) Who should keep the details of the shareholder?
The details of the shareholders of the company should be kept safe by the company owner and a copy of it should be certified by the chairman and secretary of the company and recorded in the office of the Registrar of Companies.
(However, listed companies are required by law to keep their shareholder’s details up-to-date by entering into an agreement with the Registrar of Shareholders.)
8) Who should keep the register book of shareholders?
The company should keep the registration book of the company shareholder in its registered office. In case of transfer, sale, or transfer of shares due to any transaction, the company should keep the shareholder information up to date.
A copy of the updated shareholder registration book of the company should be recorded in the office of the Registrar of Companies. It is the responsibility of the company itself to keep the details of the shareholders (shareholders, number of shares open) up to date.
9) Should a company registered with the Registrar of Companies be registered elsewhere or not?
In order to do any work or business for any purpose, the company has to register with the concerned body and/or work only with the license.
10) Companies should be registered at the local level or not?
Companies registered in Nepal usually cover the whole of Nepal. But if any law prohibits doing business within any geographical area or administrative area (province/district/local level) then the same happens. According to any law, permission, or sanction has to be obtained to do business or operate a branch in any area. In case a company opens a branch, unit, sales center, shop, or office within a local level, it has to register the business as per the rules of that local level.
11. Can I register NGO through OCR?
Yes, you can register a profit not distributing company at OCR and then take affiliation from Social Welfare Council which oversees NGOs. Also, NGOs or profit not distributing companies can enjoy tax exemption. You have to apply for tax exemption at your IRD office (tax office) to get a tax exemption certificate after getting affiliation from the social welfare council.
12. How can I check if a company name is registered in Nepal??
You can check company name availability by creating a user on the OCR website. Please refer to section 2 of this article.
13) Is it obligatory for the company to have a bank account after company registration?
Yes, this is mandatory to open a bank account after you register a company in Nepal. You need to have a bank account to get a share certificate from OCR. Also, it is advised to conduct all business transactions through the company bank account.
Some provisions regarding public company
1) How many founders should be in a public company?
A public company must have at least seven founders. When a public company sets up another public company, it does not need seven founders.
2) What is the maximum number of shareholders in a public company?
There is no limit on shareholders number in a Public Limited Company (Ltd). However, the maximum number of shareholders allowed for a Private Limited Company (Pvt. Ltd.) is 101.
3) What should be the minimum paid-up capital of a public company?
Unless otherwise provided by the prevailing law or the Government of Nepal by publishing a notice in the Gazette regarding the paid-up capital of a particular company, the paid-up capital of a public company should be at least 1 crore rupees.
4) Can I convert a public company into a private company?
You can convert a public company into a private company by fulfilling the provisions of Section 14 of the Companies Act.
6) Should a public company get approval to start a transaction or not?
A public company should start transactions only after obtaining approval as per Section 63 of the Companies Act, 2063.
7) How many days before the announcement of the annual general meeting of a public company should be published in a national-level magazine?
At least 21 days in advance.
8) Is it possible to hold the annual general meeting of the company through video conference or online?
Yes, you can hold the annual general meeting of the company through video conference or online. But, even in such a meeting, you must follow the provisions in the Companies Act and Rules.
9) Who can vote in the General Assembly?
Representatives of each shareholder or shareholder can vote at the general assembly of the company.
10) What is the quorum of the Board of Directors?
At least 51 percent of the total number of operators.
11) In order to pass the resolution in the general meeting, what percentage of the shareholders representing the share should vote in favor of the resolution?
The opinion of the majority shareholders of the House on the issue of voting. In the case of a special offer, the shareholders represent 75% shares.
12) Decision of the General Assembly Representing the number present, the details of the share percentage should be sent to the shareholder in how many days?
Within 30 days.
13) When should a public company hold a general meeting?
A public company should hold a general meeting within one year of being allowed to start the first general meeting. Thereafter, within six months of the completion of each financial year.
14) How many people have a board of directors in a public company?
3 to 11
15) How many women directors should there be on the board of directors of a public company?
The board of directors of a public company with a female shareholder should have at least one female director.
16) How many independent directors should be appointed to the board of directors of a public company?
If the company has up to 7 directors, at least one independent director should be appointed. If the company has more than 7 directors, at least 2 independent directors should be appointed.
17) Who will elect the Chairman of the Board of Directors?
One of the directors chosen by the directors will be the chairman of the board of directors.
18) What is the minimum number of shares required to become an operator?
If any number of shares is specified in the rules of the company, it should be taken by the person operating the shares accordingly.
19) What is the age requirement to be a director of a public company?
Reached at least 21 years.
20) What is the tenure of the operator?
The tenure of the operator of a private company shall be as provided in the regulations. The term of office of the director of a public company shall be 4 years at most as mentioned in the regulations.
21) How many times a year should the board of directors of a public company meet?
At least 6 times.
22) What is the difference between the meeting of the Board of Directors of a public company?
The difference between the two meetings should not be more than 3 months.
23) Who is responsible for keeping the accounts and accounts of the company?
Director or responsible officer of another company
24) Where should the company keep its accounts?
In the registered office of the company (in the company’s own head / central office).
25) How many times in a row can not the same auditor appoint his partner or ex-partner or employee or ex-employee to audit the public company?
Some provisions regarding private company registration process in Nepal
1) What is the maximum number of shareholder members in a private company?
The maximum number of shareholder members in a private company is101
2) Can I convert a private company into a public company?
As per Article 113 of the Companies Act 2063, a private company can be transformed into a public company.
3) When can a private company start transactions?
A private company can start its transaction by getting the certificate of registration and PAN/VAT certificate from the Tax office.
However, according to the prevailing law, in order to carry out a particular transaction, if approval has to be obtained from any concerned body, the transaction should be started only after obtaining such approval.
(For example Financial institutions have to do business with the approval of Nepal Rastra Bank after the registration of the company, an Insurance company should take approval from Beema Samiti, school/school Pvt. Ltd. / Ltd. should start the transaction only with the approval/permission/permission of the Department of Education or the concerned body.)
Apart from this, in the prevailing law, the company and its operator will be responsible for getting the approval/license/license of anybody to do the transaction/work accordingly.
4) Can a minor be a company manager or not?
A minor cannot be a company manager in Nepal.
5) What is the maximum number of directors on the board of directors of a private company?
The maximum number of directors on the board of directors of a private company is eleven.
6) Is it possible for a private company to raise share capital from the public by openly appealing or not?
No, It is not possible for a private company to raise share capital from the public by openly appealing
7) How many times should the meeting of the board of directors of a private company be held?
As written in the rules of the company.
Misc FAQs about Company Registration, Update, and Closure
1) Can a once registered company be liquidated or not?
The company can be liquidated by completing the process of the Companies Act.
2) When should the information about the appointment of a company liquidator be given to the office of the Registrar of Companies?
Within 7 days from the date of appointment.
3) Can a person be a liquidator of more than one company at a time?
No, a person can’t be a liquidator of more than one company at a time.
4) Should I fill a company registration application form?
No, you don’t need to fill out any physical form. You need to prepare documents and submit them to the company registration office. There are no forms to fill and submit physically.
5) Is it permissible for a company with foreign investment to issue shares in a public or not?
Companies registered as public companies in Nepal with domestic investment or with foreign investment in Nepal, or with both domestic and foreign investment, can issue shares to the public with the approval of the Nepal Securities Board.
6) Where is the office of the company registrar located in Kathmandu?
Office of the Company Registrar (OCR) is located at Tripureshwor Kathmandu ( infront of Dashrath Rangashala gate)
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