The Definitive Guide to Company Registration in Nepal: Types, Documents, and Key Considerations

 Formally registering your business is the foundational step that transforms an idea into a legal entity, capable of transacting, owning property, and growing. In Nepal, the company structure is governed by the Companies Act, 2063, and all registrations are handled by the Office of the Company Registrar (OCR).

Understanding the different types of companies and the specific documents required for each is crucial for a smooth registration process. This guide provides a detailed overview for Nepali citizens, foreign investors, and those converting existing firms.

Understanding Company Types in Nepal

1. Private Limited Company (Pvt. Ltd.): An entity with a maximum of 50 shareholders. This also includes companies with a single shareholder. It is the most common structure for startups and small to medium-sized enterprises.

2. Public Limited Company (Ltd.): A company that is not a private company, with at least seven founders and a minimum paid-up capital of NPR 1 Crore. Its shares can be offered to the public.

3. Company Not Distributing Profits: An organization established to achieve a specific objective, where any profits or savings are reinvested into the company's mission rather than being distributed to members as dividends. These companies typically have at least five founders.

Document Checklist for Company Registration (Nepali Citizens)

For the registration of a Private, Public, or Not-for-Profit company by Nepali citizens, the following documents are required:

• Application: An application in the format of Schedule 1.

• Memorandum of Association (Prabandhapatra): Two copies, with the correct format for your company type (Schedule 9 for single shareholder, Schedule 10 for other private companies, Schedule 11 for public, and Schedule 12 for non-profits).

• Articles of Association (Niyamawali): Two copies, with the correct format (Schedule 14 for private, Schedule 15 for public, and Schedule 16 for non-profits).

• Citizenship Certificates: A certified copy of the citizenship certificate for all founding shareholders.

• Agreements:

  • For Private Companies: A copy of any consensus agreement among the founders.

  • For Public Companies: A copy of any pre-incorporation agreement among the founders.

• Pre-approval/License: If the business requires prior approval from a specific regulatory body, a copy of that license or permit is needed.

• If a Nepali Company is a Founder:

  • Copy of the founding company's registration certificate.

  • A copy of the board's decision detailing the investment amount and the name of the representative.

  • A certified copy of the representative's citizenship certificate.

Additional Documents for Foreign-Owned Companies

For companies with foreign founders (joint venture or full foreign investment), the following additional documents are necessary:

• A copy of the investment approval from the relevant authority in Nepal.

• For joint ventures, a copy of the approval from the Department of Industry and the joint venture agreement.

• For Individuals: A certified copy of the founder's passport.

• For Legal Entities (Companies): A certified copy of the company's registration certificate, the board's decision to invest, a letter nominating the representative, and a certified copy of the representative's passport.

Key Considerations During Registration

• Shareholder Numbers: A private company requires at least one shareholder, while a public company needs at least seven (unless another public company is the founder).

• Document Preparation: The MOA and AOA should be typed on one side of durable Nepali paper in clear Nepali language. For foreign investment companies, they can be in English but must be accompanied by a Nepali translation.

• Signatures: All founders must sign each page of the MOA and AOA. The final page must include the full name, address, number of shares subscribed, signature, and a clear thumbprint of each founder, witnessed by one person per founder.

• Physical Presence: At least one founding shareholder must be physically present at the OCR for verification during the registration process.

This comprehensive checklist should help you prepare thoroughly for the company registration process, ensuring compliance and minimizing delays.