Features of Company Act

Features of Companies Act of Nepal 2006  

1. A company is an artificial incorporated person with limited liabilities, all the legal and contractual capacities with a distinctive common seal.

2. The ownership is divided into a share and share capital-driven with formalities compulsive of Memorandum Of Association and Article Of Association with shares transferable and perpetual succession.

3. The suffix Pvt.ltd (private limited) or ltd. (limited) to be used in all companies as the case may be.     

4. A company to be started within 1 year of approval time.

5. Facilitates of conversion of companies and development committees to the public with approval from the government.

6. There is a Compulsory provision of a company secretary for a company which has the capital of 1 crore or more that.

7. Companies Act of Nepal provides for the refusal of incorporation due to name(against laws, similar and matches existing company or insolvent company), due to objectives being against the laws and other reasons(eg, failure to submission of application fees, forged application, defect in AOA and MOA, etc).

8. It has a provision that includes several of its types in the form of a private company, a public company, profit not distributing, investment, subsidiary, the foreign company, holding company, and listed company. Few types of companies can be formed only as a public company such as bank and financial institutions, insurance, stock market, telecommunication, and mutual funds with a minimum capital of 5 crores.

9. It has a provision of deregistration. A defunct company needs to submit for deregistration with 0.5%of their capital as a fee to the Office of Company Register from the time of the last amendment.

10. It has the provision of conducting the First annual general meeting, General meeting, extraordinary general meeting, and all board meetings.

11. It facilitates a provision of the substantial shareholder as:

Hold more than 1% if share capital is up to 25 crore

Hold more than 5% if the capital is more than 25 crore.

12. Provision of  MERGER AND ACQUISITION for the public company by adopting special resolutions in its general meeting whereas for the private company it shall be as provided in its memorandum of association, articles of association, or consensus agreement.

13. Private companies should have Maximum 101 shareholders with no limitation on capital and no need to audit and disclose accounts for incorporation.

14. Public companies should have a minimum of 7 to unlimited shareholders.

15. Profit not distributing company-minimum 5 to unlimited shareholders and all the same as Public company for its incorporation.

16. A company can be incorporated by submission of all the documents (AOA, MOA, detail of promoters, application with legal documents, registration certificate, etc) to the Office of Company Registrar(OCR) and get registered within 7 days and Refusal time of 3 days.

17. Companies are required to obtain a PAN or VAT Registration certificate from the Inland Revenue Department preceding the commencement of its business depending on the value of the annual transaction of the company.

18. Company Act has the stipulation of account record keeping and auditing.

19. The provision relating to a proceeding of lawsuits and punishment.

Incorporation of the company under the act.


• Copies of proposed MOA and AOA

• Approval or license, under the prevailing law before the registration of a company carrying on any particular type of business.

• If any agreement then the copy of it for the private company

• Mutual agreement of the promoters before the incorporation of the company(PUBLIC COMPANY)

• Details of the promoters if Nepalese citizen, a certified copy of the citizenship certificate and where a corporate body is a promoter, a certificate of registration of incorporation, decision of the Board of directors, regulating The incorporation of the company and major documents regarding incorporation

For foreign company

• If the promoter is a foreign company, permission obtained under the prevailing law to invest in business or transaction in Nepal with a document proving the country of his/her citizenship. And a certified copy of the incorporation of such company or body and major documents relating to such incorporation, MOA, AOA of the company, and Nepalese translation thereof.

• For a foreign company full name, address of the registered office and principal place of business of the company, date of incorporation of the company, description of the paid-up capital and major objectives of such company along with the name, address of directors, company secretaries or main officers and description of their citizenship.

• Authorized person residing in Nepal the one who is authorized by the company to receive summons issued in the name of the company the person’s name and address in Nepal.   

• Details of the proposed investment and transaction and also where the company is to commence its transaction in Nepal, the proposed date thereof; in Nepal with the full address of the place where to operate the company in Nepal.  

• Declarations made by the director of the company that the matters obtained by the company are true and POA.

DISCLAIMER The information provided above is designed for helpful information on the subject discussed. It is not meant to be used, nor should it be used as legal advice

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