Company Law Experts Nepal

1. Introduction to Company Law in Nepal

Company law in Nepal is governed primarily by the Companies Act, 2006, which defines the formation, management, and dissolution of companies. It sets out the legal framework for private and public companies, partnerships, and non-profit organizations. The Company Registration Office (CRO) under the Ministry of Industry, Commerce, and Supplies oversees registration, compliance, and corporate governance. Company Law Experts Nepal.

Company law ensures that businesses operate transparently, maintain statutory records, and comply with tax obligations under the Income Tax Act, 2002. Legal advisory is essential for foreign and domestic investors to structure their companies effectively, comply with licensing requirements, and manage corporate governance risks. Advocates Prabin Kumar Yadav and Pratik Poudel of Medha Law and Partners specialize in providing expert company law services in Kathmandu, ensuring full compliance with Nepali laws.

2. Types of Companies in Nepal

Nepal recognizes various company types under the Companies Act, 2006:

• Private Limited Companies (Pvt. Ltd.): Restricted share transferability; minimum of one director and one shareholder.

• Public Limited Companies: Shares may be offered to the public; minimum seven shareholders required.

• Non-Profit Organizations: Established for charitable or social purposes; profit distribution to members is prohibited.

• Partnerships and Joint Ventures: Governed by partnership laws and contractual agreements; often used for foreign collaborations.

Each type has distinct registration procedures, capital requirements, and compliance obligations. Legal guidance ensures proper selection of company type based on business objectives, liability protection, and statutory obligations. Medha Law and Partners provides end-to-end advisory for company formation, structuring, and statutory compliance.

3. Company Registration Process in Nepal

The registration of a company in Nepal is regulated by the Companies Act, 2006 and executed through the Company Registration Office (CRO).

Steps for Registration:

1. Name Approval: Submit proposed company names to CRO for approval.

2. Submission of Documents:

   • Memorandum of Association (MOA)

   • Articles of Association (AOA)

   • Directors’ and shareholders’ details

   • Copy of citizenship/passport

   • Office lease or ownership proof

3. Application Filing: Online submission through the CRO portal.

4. Issuance of Registration Certificate: CRO issues certificate of incorporation after verification.

5. PAN and VAT Registration: Obtain Permanent Account Number (PAN) from IRD and VAT registration if required.

Legal experts like Medha Law and Partners facilitate the entire registration process, reducing delays, ensuring compliance, and minimizing errors in documentation.

4. Corporate Governance in Nepal

Corporate governance in Nepal ensures transparency, accountability, and proper management of companies. The Companies Act, 2006 mandates the formation of a Board of Directors, defines their duties, and sets rules for shareholder meetings. Key governance principles include separation of ownership and management, financial disclosure, and adherence to statutory obligations.

Key Responsibilities of the Board:

• Approving company policies and strategic plans

• Ensuring accurate accounting and financial reporting

• Complying with labor, tax, and environmental regulations

• Conducting annual general meetings (AGMs) and maintaining statutory records

• Protecting shareholder rights and addressing conflicts of interest

Compliance with corporate governance regulations protects companies from legal penalties, improves investor confidence, and fosters sustainable growth. Medha Law and Partners provides guidance on board structuring, drafting governance policies, and ensuring adherence to statutory requirements under Nepali law.

5. Compliance Requirements for Companies in Nepal

Companies in Nepal must comply with statutory obligations under the Companies Act, 2006, Income Tax Act, 2002, and other sector-specific laws. Compliance ensures legal operation, prevents penalties, and maintains corporate credibility.

Key Compliance Requirements:

• Annual General Meeting (AGM): Conducted as per Companies Act; minutes must be filed with CRO.

• Financial Reporting: Submission of audited financial statements to the Inland Revenue Department (IRD) and CRO.

• Tax Filing: Corporate income tax, VAT (if applicable), and withholding taxes must be reported and paid timely.

• Company Secretary Obligations: Maintaining statutory registers, share records, and board resolutions.

• Licenses and Permits: Sector-specific licenses, environmental clearances, and labor compliance documents.

Medha Law and Partners assists companies in creating compliance calendars, preparing statutory documents, and ensuring adherence to all regulatory requirements, minimizing risk of fines or legal disputes. Medha Law and Partners Is a leading law firm in Nepal.