A company is registered by submitting an application of registration and documents such as Memorandum of Association and Article of Association with the Office of Company Registrar. The format and content of these documents shall be as prescribed in Company Act 2063, hereby referred to as the Act and its rules. Details of a Company, such as a name, registered address, objectives, shareholdings, etc. can be changed easily subject to documentation and approval from OCR. In general, the following changes in a Company are common in Nepal:
- Change in Name of the company
- Change in Registered Address
- Change in Objectives of the company
- Change in Share Capital Details – Authorized, Issued, and Paid up
- Change in Shareholders and their subscribed Share Capital
- Forfeiture of Share
In this way, a Company is allowed to amend or change any of the provisions mentioned in its registration documents unless restricted by the Act, but notice of such amendment should be provided to OCR on time.
Now, Let’s move toward the related amendments and their processes.
Some of such events are discussed below:
A. How to change name of the company in Nepal:
A company is allowed to change its name after the incorporation if required. A special resolution should be passed in a General Meeting (AGM/EGM) for the same. However, such changed or new name shall not be:
- Unlawful or immoral,
- Identical or resemble with name or trademark of the existing company
- Identical or resemble the name of the company whose registration was canceled or which has been insolvent and a period of 5 years has not elapsed.
A company cannot change its name unless it gets prior approval from the OCR. It should submit an application to OCR along with the following documents:
- A resolution passed in GM to change the name.
- Amended AOA and MOA.
- Details of the amendment made along with the reason for such change.
- Payment of prescribed fee, which would be lower of
- 25% of the existing fee for new registration, or
- Rs. 5000
After such application is approved by the OCR, the company should publish a notice in the national daily newspaper regarding the change in old name for a minimum of 3 days. The company should also submit the newspaper notice to OCR within the time specified.
Read More: Things to do before Company Registration
B. How to Change objectives of the company in Nepal:
Even after incorporation, a company can add, remove or amend any existing objectives listed in MOA if it deems necessary. A special resolution should be passed in a General Meeting (AGM/EGM) for the same. However, the objective to be added should not be immoral or unlawful according to the prevailing law and order of the country.
The company can act according to changed objectives after it gets approved by OCR. The company shall make an application to OCR to inform about the change in objectives within 30 days of passing a special resolution. The following documents should also be submitted :
- A resolution passed in GM to change the name.
- Amended MOA.
- Details of the amendment made along with the reason for such change.
The amendment shall be implemented after receiving the acknowledgment letter from OCR stating the change has been recorded.
C. How to Change Address of the Company in Nepal:
The registered address mentioned in MOA specifies the primary location of the business. This helps to determine the jurisdiction of the Revenue department and Local level law and rules. After incorporation, a company can change its registered address if necessary. Any change in address can be made by adopting a special resolution in GM. (AGM/ EGM).
When such a change is required, the company should make an application to OCR in order to inform about the change in the registered office address. The application should be made within 30 days of the passing resolution, along with the following documents:
- A resolution passed in GM to change the name.
- Amended AOA and MOA.
- Details of the amendment made along with the reason for such change.
The company shall receive an acknowledgment letter from OCR stating the change has been recorded. Then, the company should apply with the Inland Revenue Department and other local levels for a change of jurisdiction, as required.
Read More: Trademark Registration in Nepal. Benefits, Process & Refusals.
D. Alteration of the share capital of the company in Nepal:
Provision of altering share capital of a company is provided in sec 56 of Company Act 2063. The Act provides the following approaches to altering Share Capital:
- Increasing the Authorized Share Capital.
- Changing the Par Value of share.
- Canceling the Issued Capital to the extent of shares not subscribed or diminishing forfeited shares (U/S 53).
Please note that there is no provision in the Act to reduce the Authorized Share Capital.
The company needs to pass a special resolution in General Meeting to make a decision to alter the capital. However, an ordinary resolution can be passed to increase the Issued Capital to the limit of Authorized Capital.
OCR should be notified of such a change by submitting an application within 30 days of passing the resolution. The following documents should also form part of the application to OCR:
- A resolution passed in GM to change the name.
- Amended MOA.
- Details of the amendment made along with the reason for such change.
- Bank Statement showing the deposit of increased capital
The effect of such change shall take place after the company receives an acknowledgment letter from OCR stating the change has been recorded.
E. How to Change Shareholder of Company in Nepal
The Act provides provisions wherein a registered company can
- Add a new shareholder,
- Remove an existing shareholder
Sale of Shares by the shareholder (Sec 43)
When an existing shareholder decides and agrees to sell its shareholder to another buyer (can be a person or a company), the buyer and the seller should make an application for transmission of such purchased share to the registered office of the company.
The following documents should be submitted:
- Application to sell by selling shareholder
- Application to buy by the buying party
- Sale contract stating the details like no of shares, the amount paid, effective date of sale
- Fee as prescribed in AOA, if any
- Share Certificate of an existing shareholder
The company shall hold a Board of Director meeting where the directors present shall verify whether or not the sale transaction is in accordance with the provisions provided in AOA. If satisfied, BOD shall transfer the share and make the necessary amendment in the Shareholder register. BOD may also reject the application to transfer within 15 days, citing the reason thereof.
When the BOD meeting accepts the share transfer request, necessary changes are made in the shareholder books. This change should be informed to OCR by submitting an application along with other details as listed below:
- Minute of BOD Meeting
- Details of allotment of shares
- Revised Shareholder register
- Income Source Statement
- Bank Statement as proof of transaction taking place
OCR shall verify the documents, and if all requirements are met, it shall update the shareholder record maintained with it.
If a change of shareholders results in a change in BOD structure, then AOA might have to be amended to accommodate the change. Here, the company shall pass a special resolution in a General Meeting to amend the AOA provision and notify the same to OCR within 30 days. The company should submit the following documents along with an application:
- Special Resolution passed in GM.
- Amended AOA.
- Details of the amendment made along with the reason for such change.
The effect of the amendment shall take place after receiving an acknowledgment letter of the same from OCR.
Read More: कम्पनी ऐन २०६३ | Company’s Act 2063 | ( संसोधन सहित )
F. Share Forfeiture (Sec 53):
In order to arrange funds for its operation, a company makes a call to its shareholders to pay for the issued share capital, and when such a call is made, the shareholders of the company need to pay or deposit the ‘call amount’ for the share they have subscribed to purchase.
Generally, a company issues a notice and mentions the timeline for the shareholders to pay the call amount. In case of failure to pay the called amount even after the expiry of the time mentioned, the company has the right to forfeit shares.
There are two options for share forfeiture:
- Forfeit Entire Shares
- Forfeit Remaining unpaid shares.
The company may sell or dispose of the shares so forfeited in any manner as provided in the AOA. In both of the cases, if it results in a change in shareholders then the Shareholder register shall be revised accordingly.
The company should inform the OCR about the Share forfeiture and change in shareholders as a result of such forfeiture. It shall submit an application to the OCR to record its Share Lagat along with the following documents:
- Minute of BOD Meeting
- Details of allotment of shares in case of sale of forfeited shares
- Updated Shareholder Register
- Income Source Statement
OCR shall verify the documents, and if all requirements are met, it shall update the shareholder record maintained with it. The company will receive an acknowledgment letter from OCR.
If the sale or disposal of forfeited shares results in a change of BOD structure, then AOA might have to be amended to accommodate the change. Here, the company shall pass a special resolution in a General Meeting to amend the AOA provision and notify the same to OCR within 30 days. The company should submit the following documents along with an application:
- Special Resolution passed in GM.
- Amended AOA.
- Details of the amendment made along with the reason for such change.
Why Company Khata?
Here is why you should choose Company Khata for changing the details of your company:
- Fast and straightforward process
- Expert guidance on matters to be changed
- Draft related documents and resolutions for your convenience
- Preparation of amended AOA/MOA
- Forever Client Relationship
