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Company Registration Process in Nepal
March 24, 2023Company can be understood as any person or organization who has desire to do a business has established a "private limited" or "public limited" in accordance to "The companies Act, 2063 (2006)" and has a perpetual succession which is autonomous and organized organization. It can acquire the moveable and immoveable property, sale or can do any kind of business like a natural person and can or can be sued in the name of the company.
Company as a tool or medium for trade and commerce is formed or incorporated by the promoter who enjoy control over the company by voting in meetings in proportion to the number of shares, they hold. It is an organization of person formed to achieve some common objectives.
This article provides general information about types of company and registration process of company in Nepal.
Types of company
1) Private company
2) Public company
3) Profit not distributing company
1 private company
Under The companies Act, 2063 those company whose shareholders shall not exceed more than 50 for incorporation and should write "private limited" to its name as last word is known as private company. Private company cannot sell its share and debenture. The paid up capital of private company is minimum 1,00,000 NPR.
2 public company
Under The companies Act, 2063 those company which needs minimum 7 promoters for the incorporation and maximum would be of any number is known as public company. Public company should write "limited" to its name as the last word. Public company can sell its share and debentures publicly. The paid up capital of the public company is minimum 1,00,00,000 NPR.
3 company not distributing profit
Profit not distributing company are those company where it shall not entitle to distribute or pay to its members any dividends or any moneys out of the profit earned or savings made for the attainment of any objectives. There should be minimum 5 promoter for the incorporation of company not distributing profit. There is no requirement of share capital while incorporating company not distributing profits.
Here are some of the Q & A relating the process of company registration in Nepal.
Q.1) what is the competent authority for the registration of company in Nepal?
Ans) The competent authority for the registration of company in Nepal is office of company registrar.
Q.2) what is the law that addresses the registration of company?
Ans) The law that addresses the registration of company is The Companies Act, 2063 (2006)
Q.3) what is the procedure of registration of company?
Ans) the procedure of registration of company are as follows;
Step 1: Reservation of company name at OCR
Step 2: After the name has been approved by the OCR, physical documents should be submitted to the at OCR
Step 3: Examination of the documents that has been submitted at documents. OCR has power to refuse to register by examining the documents.
Step 4: Granting of company certificate by OCR
Step 5: Tax registration at Inland Revenue office.
Q.4) what are the documents that are submitted at OCR?
Ans) The documents that are submitted at OCR are as follows;
|
S.N |
documents |
Set of copies |
|
1 |
Memorandum of Association of proposed company |
1 set of original |
|
2 |
Article of Association of proposed company |
1 set of original |
|
3 |
In case of public company, the copy of agreement entered between the promoters |
1 |
|
4 |
In case of private company, the copy of consensus agreement |
1 |
|
5 |
If the promoter is Nepalese citizen, certified copy of citizenship certificate |
1 |
|
6 |
If the promoter is foreign person, permission need to be obtained to carry business transaction in Nepal. |
1 |
|
7 |
If the promoter is foreign person, document proving the country of his citizenship. |
1 |
|
8 |
If the promoter is foreign company, a certified copy of such company and documents relating to incorporation. |
1 |
Q.5) what are the grounds for the refusal to register a company?
Ans) The grounds for the refusal to register a company are as follows;
1) If the name of the proposed company is identical with the name of the company that has been already registered.
2) If the name or the objective of the company is contrary to the prevailing law or it is undesirable in the view of public interest, morality, decency,, etiquette, or reflects the criminal motive.
3) If the name of the company is identical with the name of the company whose registration has been cancelled or the company is under insolvent under prevailing laws.
4) If the requirement is not fulfilled under The companies Act, 2063
Q.6) how much fees is required for the incorporation of the company?
Ans) Fees are charged on the basis of authorized capital of the company. Fees for the private company are as follows:
|
S.N |
Amount of authorized capital |
Registration fee in NPR |
|
1 |
Up to 1,00,000 |
1000 |
|
2 |
1,00,001 to 5,00,000 |
4,500 |
|
3 |
5,00,001 to 25,00,000 |
9,500 |
|
4 |
25,00,001 to 1,00,00,000 |
16,000 |
|
5 |
1,00,00,001 to 2,00,00,000 |
19,000 |
|
6 |
2,00,00,001 to 3,00,00,000 |
22,000 |
|
7 |
3,00,00,000 to 4,00,00,000 |
25,000 |
|
8 |
4,00,00,000 to 5,00,00,000 |
28,000 |
|
9 |
5,00,00,001 to 6,00,00,000 |
31,000 |
|
10 |
6,00,00,001 to 7,00,00,000 |
34,000 |
|
11 |
7,00,00,001 to 8,00,00,000 |
37,000 |
|
12 |
8,00,00,001 to 9,00,00,000 |
40,000 |
|
13 |
9,00,00,001 to 10,00,00,000 |
43,000 |
|
14 |
10,00,00,0000 |
30 of each 1,00,000 |
Fees for the public company are as follows:
|
S.N |
Amount of authorized capital |
Registration fee in NPR |
|
1 |
Up to 1,00,00,000 |
15,000 |
|
2 |
1,00,00,001 to 10,00,00,000 |
40,000 |
|
3 |
10,00,00,001 to 20,00,00,000 |
70,000 |
|
4 |
20,00,00,001 to 30,00,00,000 |
1,00,000 |
|
5 |
30,00,00,001 to 40,00,00,000 |
1,30,000 |
|
6 |
40,00,00,001 to 50,00,00,000 |
1,60,000 |
|
7 |
50,00,00,000 |
300 for each 1,00,000 |
Q.7) Is Tax Registration is required for the commencement of its business?
Ans) yes, company needs to obtain PAN or VAT Registration from Inland Revenue Department before its commencement of business.
SADA Associates provides expert services in the field of Business Taxation in Nepal, Foreign Direct Investment (FDI) in Nepal, Intellectual Property Registration in Nepal, Employment and Immigration in Nepal, Dispute Resolution and Arbitration in Nepal, and Corporate and Commercial compliance and regulatory matters in Nepal. For more information Contact us.
Please note that this guide is published for general information only and should not be considered as legal advice. You are requested to seek legal advice for specific factual situations. Please note that copyrights for this Q&A vests on Sada Associates.