1. What are the benefits of Company Registration over Proprietorship Firm?
Shareholders: A Private Limited Company can be started with at least one shareholder and there can be a maximum of 101 shareholders. So, it is very easy to add or remove a shareholder as per AOA of the company. But in case of Proprietorship Firm, there can be only one member. No other member can be added even in the time of expansion. Hence, expanding a business is easier with Private Limited Company.
Limited Liability: The maximum liability of a Shareholder in a company is limited to the value of share he/she has undertaken while registering. This is the reason why Private Limited (Pvt. Ltd.) is used at the end of company’s name. In case of Proprietorship Firm the liability of it’s owner is unlimited.
Separate Person: A Company and it’s shareholders are considered to be separate person in the eyes of law. It means the company will have separate PAN number than that of its directors and shareholders. But in case of Proprietorship firm, the PAN of business and it’s owner is same, which means there is no separate personality.
There are also other benefits of registering a Private Limited Company than Proprietorship firm, like perpetual succession, easier to get finances, easier to expand the business and so on.
2. What are the different types of companies?
According to the Companies Act 2063, following are the types of companies that can be registered in Nepal:
- Private Limited Company (With Single Shareholder)
- Private Limited Company (With Multiple Shareholder)
- Public Limited Company
- Non-Profit Company (Ex. NGO)
If you are confused with which one to get started with, kindly connect with our consultant at 9801074003
3. What is the first step of registering a company?
Company registration process always starts with the proposed name application in OCR. You can visit the official website www.ocr.gov.np or connect with our team to learn if the proposed name is available or already been taken.
Please remember there are certain rules that needs to be followed while applying for the proposed company name. Learn more here.
Is my company name available?
It generally takes 3-7 days for company name approval by OCR. Once it has been approved, you can start with registration procedures.
4. What are the documents required during company registration?
The primary document required for Company Registration in Nepal is citizenship certificate of all the shareholders. These citizenship copies have to be notarized and submitted to OCR.
Furthermore, during the time of PAN/VAT Registration a valid Rent Agreement with the landlord is required where you are planning to establish an office. If you are planning to establish the office in your own residence, the copy of Lalpurja is required to be presented in Tax Office.
Also, during the PAN Application PAN of at least one Shareholder is required for the biometric purposes.
5. What is the general process of registering a company?
Following is the step-by-step process of company registration in Nepal:
- Application of proposed company name in OCR
- Once the name is approved, MOA & AOA of the company has to be prepared.
- Final copy of MOA, AOA has to be signed by all shareholders of the company.
- All the documents along with citizenship copies have to be notarized and submitted to OCR.
- After checking all the details OCR approves your application and provides with Company Registration Certificate
6. What is the government fee and taxes during company registration?
As per the FY 2080-81 Budget there has been complete exemption of Government Fee during Company Registration as well as Capital Increment. Hence, for Fiscal Year 2080-81, it is free to register a company in Nepal.
Until previous year i.e. Fiscal Year 2079/80, Government fee for Pvt Ltd included:
- Having authorized capital up to Rs.1,00,000/- Rs. 1,000/-
- Rs. 1,00,001/- to Rs.5,00,000/- with authorized capital Rs. 4,500/-
- Rs. 5,00,001/- to Rs.25,00,000/- with authorized capital Rs. 9,500/-
- Rs. 25,00,001/- to Rs.1,00,00,000/- having authorized capital Rs. 16,000/-
- Rs. 1,00,00,001/- to Rs.2,00,00,000/- having authorized capital Rs. 19,000/-
An increment of Rs 3,000/- for 1 crore increment in Authorized Share Capital.
If you register a company in FY 2080-81, please note that you do not need to pay any government charges during registration process.
7. Can a foreign citizen register a company in Nepal?
Yes, a foreign citizen can register a company in Nepal subject to following conditions:
- Obtain foreign investment approval from Investment Board Nepal or Department of Industries.
- Obtain required approval from Nepal Rashtra Bank (NRB) for Foreign Investment.
Please note that the remaining procedures for Company Registration is same as for Nepalese Citizens.
8. What are the rules to be followed after company registration?
After registration your company needs to follow several rules throughout the year. We have listed some of them below:
- Obtain Business License if needed (Ex. Construction, Media, Tourism Etc.)
- Obtain Permanent Account Number (PAN) or Value Added Tax (VAT) from IRD.
- Open a Business Bank Account.
- File 3 Months Return with OCR.
- Obtain a copy of Share Lagat (If Bank Financing is needed)
- Maintain all Accounting & Taxation Records.
- Prepare Financial Reports and get them audited by a Licensed Auditor from ICAN.
- File Annual Income Tax Return.
- Update Your Company with OCR before Poush End.
9. How can Company Khata help entrepreneurs with Company Registration?
Company Khata Pvt. Ltd. has been helping entrepreneurs starting the company in following ways since 2020:
- We conduct extensive name search on your behalf and apply them in OCR Website.
- We provide you consultation regarding the Capital Requirement, Shareholder, Address and Objectives of your company.
- Once the name is approved, we prepare MOA, AOA draft and send them to you for the review.
- Once we receive signed documents from you, we submit them to OCR after notarizing from lawyers.
- We receive the Registration Certificate on your behalf and send it to you.
- We assist with PAN/VAT documentation.
- We provide year round compliance services for your company, i.e. Share Lagat, Amendments, Annual Update etc.
10. What are other start-up services provided by Company Khata?
Company Khata Pvt. Ltd. is itself a start-up established with the main goal to assist entrepreneurs and businesses with compliance, taxation, accounting and technical services. We provide extensive range of services to new businesses and start-ups. It includes:
