Company Act, 2063

1. Any person desirous to establish any enterprise with a profit motive may incorporate a company in the Office of Company Registrar.
2. Without registering a company under the Company Act, no person shall use the name of the company and carry on any of transaction by the name of any firm or institution.
3. There shall be at least seven promoters for the incorporation of public companies.
4. Any person desirous to incorporate a company shall make an application to Office of Company Registrar in the format prescribed by office along with pre-specified fees and following documents:
  • Memorandum of Association of the proposed company
  • Article of Association of the proposed company
  • In the case of a public company, a copy of the agreement between the promoters prior to the incorporation of the company (if any)
  • In case of a private company, a copy of consensus agreement (if any)
  • When the promoter is a 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 BODs, and major documents regarding incorporation
  • Where the promoter is a foreign citizen, a document providing the country of his citizenship
5. The office shall, after making necessary inquiries, register the proposed company within
15 days after the date of making the application and grant a company registration certificate.
6. The office may refuse to register a company in any of the following circumstances:
  • If the name of the proposed company is identical with the name of an already registered company
  • If the name or objective of the proposed company is contrary to the prevailing law or appears to be inappropriate in the view of public interest, morality, and decency.
  • If the name of the company is identical to the name of the company whose registration has been canceled or has suffered insolvency
  • If the requirements for incorporation has not been fulfilled.
7. Any company incorporated under this act will be an autonomous body with perpetual succession. The company possesses all the rights, duties, and responsibilities that are possessed by a natural person.
8. Any company incorporated under this act will be under the threshold of limited liability.
9. The number of shareholders of a private company shall not exceed fifty.
10. There shall be a minimum of seven (and maximum unlimited) shareholders in a public limited company.
11. The company shall carry all its activities and transactions by its name
12. The private company should add the words “private limited” and the public limited company should add the word “limited” to its name as the last word
13. A private company shall not sell its shares and debentures publicly.
14. A company shall not open a partnership or private firm
15. The company not distributing profit shall not distribute dividends among its members or pay an amount to members
16. The paid-up capital of the public limited company must be a minimum of ten million rupees.
17. A company carrying out transactions relating to banking, stock exchange, pension fund, or mutual funds shall be incorporated as public limited.
18. A private company shall be converted into public limited if the general meeting of the private company decides to convert. The private limited company can be converted into public limited into any of the following circumstances:
a. If twenty-five percent or more shares of a private company have been subscribed by one or more than one public company
b. If a private company subscribes twenty-five percent or more of the shares of a public company.
19. A public company can be converted into a private company under any of the following circumstances:
  • If the number of shareholders of the public limited company becomes less than seven
  • If the public limited company fails to maintain paid-up capital as prescribed by Company Act, 2063.
  • The public company shall make necessary amendments in MOA and AOA and convert into a private limited company with six months.
20. A public limited company should public it's MOA and AOA within three months after getting a license to commence its business.
21. The amendments (if any) in MOA and AOA of a public limited company should be published within three days of such amendment.
22. The prospectus of the company should only be published and distributed to the public after taking approval from SEBON, and after registering it in the Office of Company Registrar.
23. The face value of shares of private companies shall be specified in Article of Association.
24. The face of the value of shares of a public company shall be fifty rupees per share or shall be equivalent to such amount exceeding fifty rupees as is divisible by the figure ten such as 60, 70, 80…
25. The public company issuing shares to the public must allot the shares and give shareholders notice within a maximum period of three months after the date of closure of share issue.
26. The company has the power to issue shares at a premium if all of the following circumstances are satisfied:
  • The company has been making a profit and distributing dividends for three consecutive years
  • The company’s net worth exceeds its total liabilities
  • The company’s general meeting has decided to issue shares at a premium
  • The excess amount earned by issuing shares at a premium should be deposited to a premium account
27. A public company shall deal in the securities only through a securities dealer recognized to do securities transactions
28. The share certificate shall be issued to every shareholder in respect of each share subscribed by him or her within two months after allotment of shares.
29. If the net worth of a public company is reduced to half the paid-up capital or less than that the directors shall prepare an appropriate strategy for the interest of the company and shareholders within thirty-five days of knowledge of this matter.
30. No company shall purchase its own shares or lend money against the security of its own shares.
31. No company shall provide any loan or financial assistance of any kind to any person for purchasing its own shares.
32. Rule of General Meeting
  • The general meetings of a company shall be as follows: (a) Annual general meeting and (b) Extra-ordinary general meeting
  • A public company shall send a notice specifying the place, date, and agenda of meeting to every shareholder at the address supplied by that shareholder to the company in advance of at least twenty one days to hold the annual general meeting.
  • Every director of the company shall be present in the general meeting as far as possible.
  • Only the person whose name is registered as a shareholder in the shareholder register shall be entitled to attend the general meeting and cast votes at the rate of one vote for each share.
33. Every public company shall have a board of directors consisting of a minimum of three and a maximum of eleven directors.
34. Ineligible to be the director of the company
  • One who is under the age of 21
  • One who is of unsound mind or is insane
  • Who has been accused of corruption
  • Who has been convicted of theft, robbery, forgery, embezzlement, and deception
  • Who has been declared insolvent
  • Who is already a director, employee, or advisor of another company having similar objectives
35. Every company shall duly maintain its accounts according to a double-entry bookkeeping system of accounting in the Nepali or the English Language and must be maintained in accordance with Nepal Accounting Standard or Generally Accepted Accounting Principle.


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