Public Limited Company Registration in Nepal

Introduction to Public Company Registration Nepal

A Public Limited Company (PLC) in Nepal is a company that can offer its shares to the general public and must comply with the Company Act, 2063. Registration is compulsory at the Office of the Company Registrar (OCR) under the Ministry of Industry, Commerce and Supplies. A public company must have at least seven shareholders and must follow additional disclosure and compliance obligations compared to private companies. The structure is mainly suitable for large-scale investment ventures.

Who Can Register Public Limited Company

Any group of individuals or legal entities, including Nepali citizens and eligible foreigners, can register a public limited company in Nepal. The minimum number of promoters is seven. Institutions like cooperatives, banks, or other registered entities may also become shareholders. Foreigners may participate subject to conditions set by the Foreign Investment and Technology Transfer Act, 2019.

Legal Conditions to Form Public Company

To form a public limited company, the following legal conditions apply:

• Minimum of seven promoters.
• Paid-up capital of at least NPR 10 million.
• Mandatory issuance of prospectus for public offering.
• Compliance with the Company Act, 2063 and Securities Act, 2063.
• Mandatory registration at OCR.
• Registration with the Securities Board of Nepal (SEBON) for share issuance.

Step-by-Step Registration Process

1. Select company name and reserve through OCR portal.
2. Prepare Memorandum and Articles of Association.
3. Gather required documents from promoters.
4. Submit application along with legal documents to OCR.
5. Pay government registration fees.
6. Obtain Certificate of Incorporation.
7. Apply for PAN from Inland Revenue Office.
8. Register with SEBON if shares will be issued publicly.
9. Comply with post-registration disclosures and filings.

Documents Required for Public Company Registration

• Application form (as per OCR format).
• Memorandum of Association (MOA).
• Articles of Association (AOA).
• Citizenship or passport copies of all promoters.
• Agreement between promoters (if any).
• Minutes of board meeting agreeing to register company.
• Proof of office address.
• Consent letters from directors.
• Power of attorney (if submitted by representative).

Estimated Time for Complete Registration

The registration process for a public limited company generally takes 15 to 25 working days. This timeline may vary based on document verification, compliance with SEBON regulations, and additional procedural reviews by OCR. Delays may occur if any documents are missing or incomplete.

Total Cost to Register Public Limited Company

The total cost varies depending on share capital and professional fees. Typically, it includes:

• Registration fee based on capital (as per OCR fee structure).
• PAN registration cost.
• Legal service charges.
• Office rental agreement cost (if applicable). Overall, expenses range from NPR 25,000 to NPR 100,000 or more.

Official Fees and Government Service Charges

OCR registration fees are based on the authorized capital:

• NPR 10 million: NPR 15,000
• NPR 20 million: NPR 25,000
• NPR 50 million and above: up to NPR 70,000 PAN registration is free, but legal documentation fees may apply. SEBON charges may also apply if public shares are issued.

Checklist Before Applying for Public Company

• Minimum of 7 promoters identified.
• Proposed company name approved.
• MOA and AOA drafted and signed.
• Valid office address secured.
• Required capital and source of funds clarified.
• Clear objective of company stated.
• Promoters’ documents collected.
• Professional consultation obtained.

Laws Governing Public Company Formation Nepal

The following laws govern public company registration in Nepal:

• Company Act, 2063 (2006)
• Securities Act, 2063 (2007)
• Foreign Investment and Technology Transfer Act, 2019
• Income Tax Act, 2058
• Banking and Financial Institutions Act (if applicable) These laws set rules for registration, capital, governance, and compliance.

Government Agencies Involved in Registration

• Office of the Company Registrar (OCR)
• Inland Revenue Department (for PAN)
• Securities Board of Nepal (SEBON)
• Nepal Rastra Bank (in case of foreign investment)
• Municipality or Ward Office (for office location verification)

Online and Offline Filing Procedures Compared

• Online Process: OCR portal allows digital name reservation, application upload, and document submission.
• Offline Process: Manual submission at OCR counter with hard copies and payment receipts. Online is faster but requires technical understanding. Manual ensures verification but is time-consuming.

Role of Legal and Corporate Advisory Firms

Professional firms assist in:

• Drafting MOA and AOA
• Preparing required documents
• Ensuring regulatory compliance
• Coordinating with OCR and SEBON
• Offering tax and legal guidance Using experts reduces delays and legal errors during registration.

Compliance Requirements After Company Is Registered

• Maintain audited financial reports.
• Conduct annual general meetings.
• File annual returns with OCR.
• Submit tax returns to the Inland Revenue Office.
• Register and update shareholder information.
• Publish shareholder notice for share issuance.
• Maintain company records and disclosures as per Company Act.

Common Mistakes During Registration of Public Firm

• Missing signatures on MOA and AOA.
• Incorrect company name formatting.
• Incomplete citizenship or ID documentation.
• Non-compliance with minimum capital.
• Not registering with SEBON before public offering.
• Delay in PAN application after incorporation.
• Failure to file required reports post-registration.

 

FAQs

 

How many people needed to register public company?
Minimum of seven promoters are required by law.

What is the minimum capital requirement Nepal?
At least NPR 10 million is required to form a public limited company.

Is public company registration available online?
Yes, basic registration steps are available via OCR’s online portal.

Can foreigners register a public limited company?
Yes, subject to conditions under Foreign Investment laws.

What is the role of board of directors?
They manage operations, make strategic decisions, and ensure compliance.

Do public companies need annual audit reports?
Yes, it is mandatory under the Company Act.

How long does the full registration process take?
It usually takes 15 to 25 working days.

Are all shareholders required to be Nepali citizens?
No, foreigners can invest with government approval.

What government office handles public registration?
Office of the Company Registrar (OCR) is responsible.

Can a private company be converted to public?
Yes, through procedures outlined in the Company Act, 2063.