Introduction
Company registration in Nepal establishes a legal entity with distinct rights and obligations under Nepalese law. The process involves registration with the Office of the Company Registrar under the Companies Act, 2063 (2006). Registration grants the company legal recognition, enabling it to enter contracts, own property, and conduct business operations. The Companies Act, 2063, and the Company Registration Rules, 2064, govern all registration procedures and requirements. Proper registration protects shareholders, creditors, and the public by ensuring transparency and accountability in business operations.
Types of Companies in Nepal
Private Limited Company
A private limited company restricts share transfers and limits membership to a maximum of 200 shareholders. This structure suits family businesses and small to medium enterprises seeking liability protection. Private limited companies require a minimum of two directors and two shareholders. The company must maintain registered office premises and file annual financial statements with the Company Registrar. Private limited companies offer flexibility in management while maintaining legal separation from owners.
Public Limited Company
Public limited companies allow unrestricted share transfers and public share offerings. These companies require a minimum of seven shareholders and seven directors. Public limited companies must list on the Nepal Stock Exchange if they meet specified criteria. The structure suits large enterprises requiring substantial capital investment. Public limited companies face stricter regulatory requirements and disclosure obligations compared to private entities.
One Person Company
One person companies allow a single individual to establish and operate a company with limited liability protection. This structure suits entrepreneurs seeking business formalization without multiple shareholders. One person companies require one director who serves as the sole shareholder. The company maintains separate legal identity from the individual owner. This structure became available under amendments to the Companies Act, 2063.
Pre-Registration Requirements
Name Approval
The company name must comply with the Companies Act, 2063, and related regulations. Names must not duplicate existing registered company names or closely resemble them. The name must not contain restricted words without proper authorization from relevant authorities. Applicants submit name approval applications to the Office of the Company Registrar with supporting documentation. The registrar approves or rejects applications within seven working days of submission.
Memorandum of Association
The Memorandum of Association defines the company’s objectives, powers, and external relationships. This document specifies the company’s name, registered office location, and business objectives. The memorandum establishes the relationship between the company and external parties. All shareholders must sign the memorandum before submission to the registrar. The document forms the company’s constitutional foundation and governs external dealings.
Articles of Association
The Articles of Association regulate internal management and shareholder relationships. These articles establish procedures for shareholder meetings, director appointments, and dividend distributions. The articles define voting rights, share transfer procedures, and dispute resolution mechanisms. All shareholders must approve the articles before company registration. The articles may be amended through shareholder resolutions following specified procedures.
Registration Process and Steps
Step 1: Name Approval Application
Submit a name approval application to the Office of the Company Registrar with three proposed company names in order of preference. The application must include the company’s proposed objectives and business activities. Applicants provide the names and addresses of proposed directors and shareholders. The registrar examines the application for compliance with naming requirements. Approval typically occurs within seven working days of submission.
Step 2: Document Preparation
Prepare the Memorandum of Association and Articles of Association according to the Companies Act, 2063. These documents must comply with statutory requirements and contain all mandatory provisions. Obtain signatures from all proposed shareholders on both documents. Ensure documents are properly dated and witnessed as required by law. Prepare additional documents including director identification and address proof.
Step 3: Registration Application Submission
Submit the registration application to the Office of the Company Registrar with all required documents. The application must include the approved company name and completed registration forms. Attach the Memorandum and Articles of Association with all required signatures. Include director and shareholder identification documents and address proofs. Submit the application in person or through authorized representatives.
Step 4: Document Verification
The Company Registrar examines submitted documents for compliance with statutory requirements. The registrar verifies that all mandatory provisions appear in the Memorandum and Articles. The registrar confirms that director and shareholder information is complete and accurate. The registrar may request additional information or clarification within specified timeframes. Document verification typically completes within 15 working days.
Step 5: Certificate of Incorporation Issuance
Upon approval, the Company Registrar issues the Certificate of Incorporation. This certificate confirms the company’s legal existence and registration date. The certificate includes the company’s registration number and date of incorporation. The company acquires legal personality from the date of incorporation. The certificate serves as proof of company registration for all official purposes.
Required Documents Checklist
| Document | Purpose | Requirement |
|---|---|---|
| Name Approval Letter | Confirms company name availability | Mandatory |
| Memorandum of Association | Defines company objectives and powers | Mandatory |
| Articles of Association | Regulates internal management | Mandatory |
| Director Identification | Verifies director identity | Mandatory |
| Director Address Proof | Confirms director residence | Mandatory |
| Shareholder Identification | Verifies shareholder identity | Mandatory |
| Shareholder Address Proof | Confirms shareholder residence | Mandatory |
| Affidavit | Declares accuracy of information | Mandatory |
| PAN Certificate | Tax identification number | Mandatory |
| Citizenship Copy | Citizenship verification | Mandatory |
Registration Fees and Costs
| Company Type | Registration Fee (NPR) | Memorandum Fee (NPR) | Total Cost (NPR) |
|---|---|---|---|
| Private Limited (up to 10 lakhs) | 5,000 | 500 | 5,500 |
| Private Limited (10–50 lakhs) | 10,000 | 1,000 | 11,000 |
| Private Limited (above 50 lakhs) | 15,000 | 1,500 | 16,500 |
| Public Limited | 25,000 | 2,500 | 27,500 |
| One Person Company | 5,000 | 500 | 5,500 |
Post-Registration Obligations
Annual Financial Statements
Companies must prepare and file annual financial statements within six months of the financial year end. Financial statements must include the balance sheet, profit and loss statement, and cash flow statement. Statements must comply with Nepal Accounting Standards and the Companies Act, 2063. Audited financial statements are mandatory for companies exceeding specified thresholds. The Company Registrar maintains filed statements as public records.
Annual General Meeting
Companies must conduct an Annual General Meeting within six months of the financial year end. The meeting must include shareholder approval of financial statements and director appointments. Companies must provide shareholders with notice at least 14 days before the meeting. Meeting minutes must be recorded and maintained at the registered office. The registrar may require submission of AGM minutes upon request.
Tax Compliance
Companies must obtain a Permanent Account Number (PAN) from the Inland Revenue Department. Companies must file annual income tax returns within the specified deadline. Companies must maintain proper accounting records and supporting documentation. Companies must comply with Value Added Tax (VAT) registration and filing requirements if applicable. Tax compliance is mandatory regardless of company profitability.
Registered Office Maintenance
Companies must maintain a registered office at the address specified in the Memorandum of Association. The registered office must be accessible during business hours for official communications. Companies must display the company name and registration number at the registered office. The registered office address may be changed through formal procedures with the Company Registrar. The registrar must be notified of any address changes within 30 days.
Common Registration Challenges
Name Rejection
The Company Registrar may reject proposed names that duplicate existing registrations or closely resemble them. Names containing restricted words without proper authorization face rejection. Applicants must submit alternative names for consideration. The registrar provides reasons for rejection in writing. Applicants may appeal rejection decisions through specified procedures.
Document Deficiencies
Incomplete or incorrectly prepared documents delay the registration process. Missing signatures or improper witnessing of documents causes rejection. Applicants must correct deficiencies and resubmit documents within specified timeframes. The registrar provides detailed feedback on required corrections. Proper document preparation prevents delays and ensures smooth registration.
Director Qualification Issues
Individuals with criminal convictions or insolvency history may face restrictions on director appointments. Directors must meet age and citizenship requirements under the Companies Act, 2063. The registrar verifies director qualifications before approving registration. Applicants must provide complete director information and supporting documentation. Director qualification issues require resolution before registration approval.
Axion Partners: Leading Service Provider
Axion Partners stands as the No. 1 service provider for company registration in Nepal. The firm offers comprehensive registration services including name approval, document preparation, and submission management. Axion Partners maintains expertise in Companies Act, 2063, and current registration procedures. The firm ensures compliance with all statutory requirements and timely document submission. Axion Partners provides post-registration support including annual compliance and regulatory filings.
Frequently Asked Questions
How long does company registration take in Nepal?
Company registration typically completes within 20-30 working days from application submission, including name approval and document verification phases.
What is the minimum capital requirement for company registration?
Nepal does not mandate a minimum paid-up capital for private limited companies, though articles may specify capital requirements.
Can a foreigner register a company in Nepal?
Foreign nationals may register companies in Nepal as shareholders or directors, subject to compliance with foreign investment regulations and documentation requirements.
What is the difference between private and public limited companies?
Private limited companies restrict share transfers and membership to 200 shareholders, while public limited companies allow unrestricted share transfers and public offerings.
Is annual audit mandatory for all companies?
Annual audit is mandatory for companies exceeding specified turnover thresholds or shareholder requirements under the Companies Act, 2063.
How often must companies file financial statements?
Companies must file annual financial statements within six months of the financial year end with the Company Registrar.
Can company name be changed after registration?
Company names may be changed through shareholder resolution and Company Registrar approval, following specified procedures and fee payment.
What happens if registration documents are incomplete?
The registrar requests corrections and resubmission within specified timeframes; failure to comply may result in application rejection.
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Conclusion
Company registration in Nepal establishes legal business entities under the Companies Act, 2063. The process requires proper document preparation, name approval, and submission to the Office of the Company Registrar. Registration grants legal personality, enabling companies to conduct business operations and enter contracts. Post-registration compliance includes annual financial statements, general meetings, and tax obligations. Axion Partners provides expert guidance throughout the registration process and ensures full statutory compliance.
