Things to do After Company Registration

Things to do after Company Registration

To start a business in Nepal, the first thing you need to do is register your company. Choosing a private limited company is better than a private firm for the future because it provides limited liability, easier access to funding, and enhanced growth opportunities. Shareholders are protected from personal liability, attracting investors. Also, a company structure simplifies raising funds through equity shares. Additionally, it offers continuity beyond owner changes and is perceived as more credible, aiding business expansion. After registering, it’s essential to follow the rules to operate legally and avoid penalties. In this blog, we’ve listed seven crucial steps every entrepreneur should take after registering the company. Whether you’re an experienced entrepreneur or a new business owner, our guide will assist you in strengthening your company’s legal foundation.

After registration with the Registrar of Companies, all corporations are considered legal entities. They should follow the provisions mentioned in their Articles and Memorandum of Association (AOA & MOA). Apart from AOA & MOA, every company is required to comply with following provisions:

1. Obtain a license or permit

In Nepal, different types of companies need to get licenses or permits from the right authorities before starting their business. Each license has its own set of laws and rules to follow. The type of company is checked before or after obtaining the Permanent Account Number (PAN).

1.Every construction company must obtain a Construction License from the local authority.

2. Media companies must obtain a license from the Department of Communications.

3. An industrial company should be registered with the Department of Industries or Cottage and Small-Scale Industries.

4. Tours and Travel Companies with certain objectives must obtain a license from the Department of Tourism.

2. Permanent Account Number (PAN) should be obtained

During the registration process, a company gets its Permanent Account Number (PAN) through a reservation letter. To obtain the PAN officially, the company must visit the Internal Revenue Department with the same letter. It’s essential to have a PAN to conduct business operations, including opening a bank account and paying income tax. The PAN serves various purposes and is vital for smooth business transactions.

Also, if you are selling VAT (Value Added Tax) goods or items through your company, then you must register for VAT, if the following transaction exceeds:

Goods turnover: Rs 50 lakhs

Service turnover: Rs 20 lakhs

Goods and services turnover: Rs 20 lakhs

3. Opening a bank account is important

After obtaining a Permanent Account Number (PAN), opening a bank account is a crucial step for your company. Having a separate bank account for your company keeps your personal and business transactions clear and organized. It adds credibility to your company, making it easier to access financial opportunities like loans and investments. Additionally, a company bank account is essential for managing accounts, paying taxes, and handling expenses efficiently.

4. 3 Months Statement

Every private limited company is required to submit a preliminary statement to the Registrar of Companies office within three months of registration. For this, the address information, share bond details and minutes of the Board of Directors meeting have to be uploaded online. If the address is not provided within three months, additional penalty will be payable.

5. General Meeting

For every private limited company, it’s essential to hold a general meeting within six months after the financial year ends. If the company is new, the general meeting should happen within one year of registration. The annual general meeting must follow the company’s regulations, and the required number of participants should also be align with the company’s rules.

6. Compliance with tax regulations

Every company has to follow the rules under Income Tax Act 2058 and Value Added Tax Act 2052. This includes the responsibilities of preparing tax returns, filing returns and making payments. In Nepal, particularly, VAT and Withholding Tax statements should be submitted monthly, while annual income statements should be submitted by filing advance income tax 3 times a year.

If you do not comply with the tax regulations, you will have to pay additional fees and fines to the Internal Revenue Department.

7. Financial records to be maintained

Every company must maintain its accounts in either Nepali or English language and follow the double accounting system. If the company wants to keep its accounts at a location other than the official address, it needs approval from the company registrar’s office. The typical financial statements prepared by a company are as follows:

a. Balance Sheet

b. Profit & Loss A/c

c. Cash Flow Statement

d. Statement of Change in Equity

8. Prepare Audit Report

Regardless of its operating status, every company has to hire an ICAN-Licensed auditor for an annual audit. The auditor examines the financial statement of the company to ensure its accuracy, proper presentation, and agreement with the provisions of different acts. The audit report must be presented at the company’s annual meeting and is required when submitting the annual report on the website of OCR.

9. Submit the annual statement

Every business must submit its annual report online within six months of the end of its fiscal year (i.e. Poush End). This includes the audit report, general meeting minutes, auditor appointment letter, section 51 statement, and minutes from the board of directors. Non-compliance with this provision can result in severe consequences.

After registration, it is clear that all businesses must stick to the required regulations, otherwise it may be subject to legal complications and penalties.

How can Company Khata will Help You?

Company Khata is a startup that helps you with registration, branding, accounting, taxation and various compliance related issues. We guarantee you hassle-free and timely services along with state-of-art communication and filing system.

Company Khata provides you following services:

a. Company Registration

b. Amendments in Company

c. Company Update

d. Accounting & Taxation

e. Trademark Registration

f. EXIM Code Registration

g. Web related services