Company registration in Nepal is the legal process of officially establishing a business under the Companies Act 2006. It involves registering a company’s name, submitting required documents, and obtaining approval from the Office of Company Registrar (OCR).
This article explains the process of company registration in Nepal, including the types of companies, required documents, fees, and step-by-step online registration.
Types of Companies
Under Nepal’s Companies Act 2063, you can register three main types of companies:
Private Company: A company with a limited number of shareholders (up to 101) that cannot raise funds from the general public. This type is common for startups and small businesses.
Public Company: A company that can issue shares and raise capital from the public. It must have at least seven shareholders and is suitable for larger enterprises.
Profit Non-Distributing Company: These companies are established for social, academic, or welfare purposes and do not distribute dividends to shareholders.
Why Register Your own startup Company?
Under Nepal's Companies Act 2063, conducting business without formal registration is illegal and can lead to fines or restrictions. Registering your company with the Office of Company Registrar (OCR) provides legal status and protects against fraud.
Beyond company registration, securing a trademark registration for your brand name and logo further protects your business identity from misuse or imitation. Together, company and trademark registration help establish your startup’s credibility and safeguard your intellectual property in the competitive market.
Process of Company Registration in Nepal
Registering a company in Nepal involves several important steps to ensure your business is legally recognized. Here is a clear step-by-step process:
Name Reservation
The first step is to choose and reserve your company’s name. You can do this online by visiting the Office of Company Registrar (OCR) website.
Document Preparation
After reserving the name, prepare all the required documents. It includes the Memorandum of Association (MOA) and Articles of Association (AOA), which describe your company’s purpose, rules, and structure. You also need citizenship certificates or identification documents of all shareholders. Make sure these documents are properly signed and notarized.
Online Application Submission
Next, you submit the company registration application through the OCR’s online portal. During submission, you will receive a tracking number or submission ID. Keep this number safe as it helps you check the status of your application.
Visit the OCR Office
After submitting online, you must visit the OCR office with the original signed documents for verification. The OCR will examine your paperwork for accuracy and compliance with the law. If everything is in order, they will approve your registration.
Certificate Issuance
Once approved, the OCR issues your company registration certificate, which officially recognizes your business. You can then use this certificate to open bank accounts, enter contracts, and legally operate your company.
Documents Required for Company Registration
To register your company successfully, you need to prepare and submit the following documents:
- Company Name Reservation Proof: Confirmation from OCR that your company name is reserved.
- Memorandum of Association (MOA): This document outlines your company’s objectives and business scope.
- Articles of Association (AOA): Defines the company’s internal rules, governance, and shareholder responsibilities.
- Citizenship Certificates or IDs: Valid identification for all shareholders and directors.
- Company Address Proof: Evidence of the official business address such as a rental agreement or ownership document.
- Capital Investment Details: Information on the amount of capital the shareholders are investing.
- Other Supporting Documents: Depending on your business type, you may also need agreements between shareholders or prior approvals from government agencies.
All documents, especially MOA and AOA, should be notarized to confirm their authenticity.
Registration Fees
The government charges a registration fee based on your company’s authorized capital. Fees vary depending on whether you register a private or public company:
Private Company:
Fees start from NPR 1,000 for companies with capital up to NPR 100,000 and increase with the size of the authorized capital, going up to around NPR 100,000 for very large companies.
Public Company:
The fee structure differs and generally starts higher due to larger capital and stricter regulations. Fees increase proportionally with the company’s capital.
It’s important to budget for these fees as part of your startup costs.
Annual Compliance Requirements in Nepal
Once your company is registered, you must meet certain legal requirements every year to remain in good standing:
Annual General Meeting (AGM):
You must hold an AGM to present your company’s financial statements and reports to shareholders. This keeps everyone informed about the business’s performance.
Business Registration Renewal:
You are required to renew your business registration with the OCR annually to continue legal operations.
Tax Compliance:
Your company must file tax returns regularly, including Value Added Tax (VAT) registration if applicable, with the Inland Revenue Department.
Financial Statements and Audit:
Prepare and submit audited financial statements each year, depending on the size of your business, to ensure transparency and accountability.
Labor Law Compliance:
If you employ staff, follow Nepal’s labor laws regarding employment contracts, benefits, and workplace safety.
Meeting these obligations is crucial to avoid penalties and maintain your company’s legal status.
How Long Does It Take to Register a Company in Nepal?
Registration typically takes 7 to 10 business days (excluding holidays). Upon registration, your company receives a unique registration number and legal entity status (e.g., Pvt. Ltd., Ltd., LLC).
Additional Compliance for Public Companies in Nepal
Includes compliance with securities laws, corporate governance standards, and shareholder disclosures.
FAQs on Company Registration in Nepal
Can a Single Individual Register a Private Company in Nepal?
Yes, a single individual can establish and register a private company in Nepal, with ownership not exceeding 101 members.
Where Can I Register My Company in Nepal?
Company registration is facilitated by the Office of Company Registrar (OCR). Online registration is available through the OCR website at https://application.ocr.gov.np/faces/OnlineUserLogin.jsp.
Is Company Registration Sufficient for Business Operations in Nepal?
No, apart from company registration, businesses in Nepal must also register for PAN (Permanent Account Number) or VAT (Value Added Tax) for legal operation.
What Additional Compliance Is Required for Public Limited Companies in Nepal?
Public companies must comply with securities laws, maintain higher corporate governance standards, disclose information to shareholders, and meet specific reporting requirements to the Securities Board of Nepal (SEBON).
Is there any waiver of fees for new company registration for women?
Government of Nepal has provided concessions for registering new company to women entrepreneur from fiscal year 2082/83.
Conclusion
Registering your company in Nepal is essential for legal compliance and business credibility. Stay updated with regulatory changes and consult with OCR for the latest requirements to ensure smooth operations.