Whether you are running a business or are planning to start one, you will need to register your company in Nepal. The process can be quite complicated, however, and you will need to know a few things before you can proceed.
Limited Liability Companies
Whether you’re planning to open a business in Nepal, or already have one, the process of registering a company is straightforward and quick. This article outlines the steps involved in the process and explains the types of companies you can register.
A limited liability company is a legal entity, which is formed to limit the personal liability of shareholders. This type of company can have a single owner or multiple owners. It also has a separate, formal business structure. In addition, a limited liability company may be organized to provide professional services, such as law or osteopathic medicine.
Unlike a partnership, a limited liability company has a legally separate existence from the owner. It is therefore not subject to the liability of the members, who are only liable for debts incurred by the company.
To register a limited liability company in Nepal, the following steps must be followed:
A foreign limited liability company must submit a certified copy of its documents to the Office of Company Registrar. In addition, the company must pay the required fees to transact business in this state. Depending on the business, the company may be required to obtain licenses or other approvals from the authorities.
A company can be registered as a Private or Public Limited company. Generally, foreign entrepreneurs choose to register a Private Limited Company. A Private Limited Company is a business that is limited to selling shares to a select group of shareholders.
The process for registering a Private Limited Company in Nepal depends on the type of company you want to register. Generally, the process involves the following steps:
- Choose a unique company name and ensure that it is available for registration by checking with the Office of the Company Registrar.
- Prepare and file the necessary documents, including the memorandum and articles of association, with the Office of the Company Registrar.
- Pay the registration fees and any other applicable fees.
- Once the registration process is complete, the Office of the Company Registrar will issue a certificate of incorporation, which serves as proof of the company’s registration.
It’s important to note that the specific requirements and steps involved in the company registration process in Nepal may vary depending on the type of company you want to register. It’s recommended that you seek the advice of a professional, such as a lawyer or a chartered accountant, to ensure that the process is completed correctly.
Profit Not Distributing Companies
Several types of companies are formed in Nepal. Among them, the profit not distributing company is one of the most common business structures in the country. It is incorporated to support the social welfare, educational, and public utility objectives. It is also incorporated for the protection of the collective rights of a particular profession. The registration process of this type of company is regulated by the Companies Act 2063.
A profit not distributing company must be registered with the Social Welfare Council. In addition, it must be tax exempted under the Income Tax Act 2002.
The name of the company should not include “private limited” for not-for-profit companies. The company must also have a management letter that is typed on durable paper. The company must be registered at the Office of Company Registrar (OCR). The time required to register a company is seven days from the date of application.
A not-for-profit company must use its assets for a purpose that is deemed worthy by the government. It is not allowed to distribute profits, property, or bonuses. However, it is permitted to receive donations or membership fees, provided that these are in accordance with the laws.
Cost of registering a company
Whether you are planning to set up a business in Nepal or are already doing so, it’s important to know what the cost of registering a company in Nepal is. The process is governed by the Companies Act 2006. Unlike many countries where company registration is easy, in Nepal, the process is a complex one.
Before you begin the process of registering a company, you need to get a number of things in place. First, you need to make sure you have a legally registered address for your company. Then, you need to open an account with the central bank of Nepal. You also need to pay a company registration fee to the government.
The amount you will have to pay for company registration in Nepal depends on the authorized capital of your business. There are different government fees for different authorized capital levels.
The minimum paid-up capital is Nrs. 1 Lakh. You can choose a lower authorized capital level if you are not planning to raise capital in the near future. Then, you will have to deposit your paid-up capital into your company’s bank account within ‘x’ days of registering your business in Nepal.
You will also have to pay taxes. For instance, you will have to register for VAT at the Inland Revenue Office. In addition to this, you will have to obtain a PAN for your company.