Private and Public Company Limited Nepal

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26 Jun Business
Private and Public Company Limited Nepal
The initial process of registration of a company can be defined as incorporation and this showcases the legality of the company that has abided by the governing company laws of the country

The establishment of any company requires a legal process which secures their presence in the market. A company has an identity of its own, for e.g. ABC Pvt. Ltd. needs to secure their company name at the Office of the Company Registrar in Nepal; this allows no other company with the same name to register themselves in the near future. The company registration policies and regulations are to be thoroughly pursued before one can catalog their company.

The COMPANIES ACT, 2063 (2006) governs the incorporation of companies in Nepal. A private company is privately held, meaning the founders, management team or a group of individual investor owns the company. Whereas, a public company on the other hand refers to a company that has sold its certain portion of shares to the public via Initial Public Offering (IPO) in order to raise funds. A public company shares can be freely traded, on the other hand private companies are restricted to do the same.

A private entity can be established by an individual and the maximum number of members cannot exceed 50. A public company establishment requires different set of manuals that needs to be adhered before the registration process is initiated, i.e. a minimum of 7 members are required for its incorporation. The maximum number of shareholders is not limited in a public company; the company is allowed to issue a public offering shares, bonds etc. as a safekeeping to generate funds from the general public. The public company requires a certificate of commencement of business to commence their business. A public company is denoted with Ltd., whereas, a private firm is denoted by Pvt. Ltd.

 

Paid Up Capital and Registration Fee

A public company requires a minimum of NPR 1,00,00,000 as a paid up capital to begin the registration process by making a payment of NPR 16,000. Conversely a private company requires only a minimal paid up capital, i.e. NPR 1,00,000 with a registration fee of NPR 1,000.

What is incorporation?

The initial process of registration of a company can be defined as incorporation and this showcases the legality of the company that has abided by the governing company laws of the country.

Documents Required

Public Company Private Company

Application as per ‘SCHEDULE 1’  /  Application as per ‘SCHEDULE 1’

Article of Association as per ‘SCHEDULE 2’  /  Article of Association

Article of Memorandum as per ‘SCHEDULE 3’  /   Memorandum of Association

Agreement of founding members of the company  /  Shareholder’s Agreement

Notarized citizenship copy of the founders   /  Notarized citizenship copy of the founder 

*Applicants can acquire the application forms from Office of the Company Registrar at Tripureshwor, Kathmandu.

 

Submission

The documents mentioned above are mandatorily to be submitted at the Office of the Company Registrar to establish the process. The registration process can take up to 10 days after all necessary inquiries are completed. The Office issues the registration certificate which deems the company as incorporated company under the Companies Act, 2063 (2006). Hereon, the company is required to attain a PAN/VAT Registration Certificate from the Inland Revenue Department depending on the business address of the company, before commencing financial transactions.

Refusal of Incorporation

There have been instances where the company registration is refused by the Office of the Company Registrar on following grounds:

  1.  If the proposed name of the company is identical to an existing company, registered at     the Office of the Company Registrar.
  2.  If the name/objective of the company doesn’t coherently abide by the prevailing laws.
  3.  If the required documents for the incorporation are not duly fulfilled.

If the registration is refused, the Office of the Company Registrar issues a notice to the concerned party within 15 days from the initial date of application.

 

Benefits of Public/Private Company

Public Company Private Company

Selling of stocks to generate funds   \   Not answerable to stockholders

Credibility amongst general public   \   Limited Liability

Expansion opportunities grow exponentially   \   Easy Incorporation

Transparency   \   Easy control and management

 

Registration of a company can be a tedious task for any aspiring entrepreneur or even for a team of individuals who wish to attain a simplified operation of the same. At, Trilegal we are at yourservices for any queries regarding the registration process of the company or to be your legal partner whilst securing your incorporation from any legality.