Skip to main content

Legal provisions for starting a company in Nepal

Short answer

A company is registered under the Companies Act, 2063 at the Office of the Company Registrar through name approval, memorandum and articles, certificate of incorporation, then PAN/VAT and other licences.

Explain the legal provisions and the procedure for registering a company in Nepal.

Companies in Nepal are governed mainly by the Companies Act, 2063 (2006), with the Industrial Enterprises Act, 2076 for industries, and tax laws. Registration is done at the Office of the Company Registrar (OCR), under the Ministry of Industry, Commerce and Supplies.

Types of company under the Act

TypeMain features
Private limitedOne to 101 shareholders; shares not offered to the public; restricted transfer of shares; limited liability
Public limitedCan offer shares to the public; at least seven promoters; minimum paid-up capital of Rs 1 crore; more disclosure
Non-profit companyFormed for social or charitable aims; profit is not distributed

(These limits can be changed by amendment, so check the current Act.)

Procedure

  1. Select and reserve a company name at the OCR.
  2. Prepare the Memorandum of Association and Articles of Association (objectives, capital, share structure, management rules).
  3. Submit the application with promoters' citizenship documents, capital details and fee.
  4. Obtain the certificate of incorporation from the OCR; the company becomes a legal person, separate from its owners.
  5. Tax registration: Permanent Account Number (PAN) from the Inland Revenue Department, and VAT registration where required.
  6. Other licences as needed (industry registration, local ward or municipality business registration, sector-specific approvals, foreign-investment approval where applicable).
  7. Open a bank account and register staff for social security as per labour laws.

Answer: A company is registered under the Companies Act, 2063 at the Office of the Company Registrar through name approval, memorandum and articles, certificate of incorporation, then PAN/VAT and other licences.

✓ Answer checked by Claude Opus 5.5 (high effort)

Related questions

All Entrepreneurship Development chapter 8 questions →