Ownership and structure for software company

Choice of ownership

As CEO of a software company in Nepal, I would prefer a private limited company registered under the Companies Act, 2063, which may later become a public company.

Reasons

1. Limited liability: Protects the founders' personal assets from business risk.
2. Separate legal identity and perpetual succession: Continuity independent of founders; clients and investors trust a registered company.
3. Capital raising: Easy to bring in venture capital, angel investors and equity partners; shares can be given to employees (ESOP) to retain talent.
4. Professional management and control: Few shareholders (1 to 101) keep decisions fast and the strategy confidential.
5. Growth path: Can convert to a public company and list on NEPSE later.
6. Credibility for export and outsourcing contracts with foreign clients; easier foreign investment (FITTA).
7. Tax benefits: IT firms receive tax incentives under the Industrial Enterprises Act, 2076.

A sole proprietorship or partnership would not offer limited liability or easy funding. A public company needs heavy disclosure early on.

Suitable organizational structure

A hybrid (project / matrix) structure fits a software company, since work is done in projects needing people from different skills.

               [CEO]
                 |
   +-------+-----+------+---------+
 [CTO]   [HR]  [Finance] [Marketing]
   |
 +-+------+--------+
[Dev] [QA] [Design] [Support]
  |     |      |
Project A team: members drawn from each unit
Project B team: members drawn from each unit

Benefits: flexible, good use of specialists, quick response to client needs, strong teamwork. A flat structure with few levels supports creativity and communication.