Critical Aspects of Company Name Reservation in Nepal

If you are comparing a private vs public company in Nepal, the first legal checkpoint you will face is company name reservation.
For foreign companies, this step often looks simple but carries real regulatory risk.

A rejected or poorly structured name can delay incorporation by weeks.
Worse, it can trigger rejections later during licensing, banking, or foreign investment approval.

This guide explains how name reservation works in Nepal, why the rules differ for private and public companies, and what foreign founders must get right the first time.

You will also learn how the process connects to ownership limits, branding strategy, and future expansion plans.

Why Company Name Reservation Matters in Nepal

Name reservation is not branding alone.
In Nepal, it is a legal validation process.

The proposed company name is reviewed by the Office of Company Registrar (OCR) to ensure it complies with statutory, linguistic, and public-interest rules.

Once approved, the name is locked for a limited period.
Only then can incorporation move forward.

For foreign companies, name reservation directly affects:

• FDI approval timelines

• Bank account opening

• Trademark alignment

• Future branch or subsidiary expansion

This is why the private vs public company in Nepal decision must be made before name submission.

Private vs Public Company in Nepal: A Quick Context

Before diving into name rules, it helps to understand how private and public companies differ at a structural level.

Private Company in Nepal

A private company is the most common choice for foreign investors.

Key features include:

• Limited shareholders

• No public share issuance

• Lower disclosure obligations

• Faster regulatory approvals

Most FDI-backed subsidiaries use this model.

Public Company in Nepal

A public company is designed for large-scale operations.

Key characteristics include:

• Ability to issue shares to the public

• Higher minimum capital

• Stricter governance requirements

• Greater scrutiny during name approval

Public companies face more restrictive naming standards, especially around words implying public trust.

Legal Basis for Name Reservation in Nepal

Name reservation is governed primarily by:

• Companies Act, 2006

• Company Registration Regulations

• OCR naming directives and circulars

The law requires that every company name must be:

• Distinct

• Non-misleading

• Lawful

• Not contrary to public morality or interest

For foreign companies, additional scrutiny applies when names reference foreign countries, global brands, or regulated sectors.

Step-by-Step: Company Name Reservation Process in Nepal

Here is how the process works in practice.

1. Online Application Submission

The applicant submits a proposed name through the OCR’s online system.
Supporting details include company type and business objectives.

2. Preliminary System Check

The system checks for:

• Exact or close similarity

• Restricted or sensitive words

This is not final approval.

3. Manual Review by OCR Officers

OCR officers assess:

• Legal compliance

• Sector sensitivity

• Public perception

This stage often causes delays.

4. Approval or Rejection

If approved, the name is reserved temporarily.
If rejected, reasons are provided and resubmission is required.

Key Naming Rules Every Foreign Company Must Know

The OCR follows strict internal guidelines.

Mandatory Naming Principles

A company name must:

• Be unique and distinguishable

• Reflect lawful business activities

• Avoid exaggeration or deception

• Match the company’s legal structure

Commonly Restricted Words

Certain words require special approvals or are outright restricted.

Examples include:

• Bank

• Insurance

• Trust

• University

• Government

• National

These restrictions are stricter for public companies than private ones.

How Private vs Public Company Status Affects Name Approval

This is where many foreign founders get caught off-guard.

Naming Flexibility for Private Companies

Private companies generally enjoy:

• Broader naming options

• Easier approval for descriptive terms

• Faster processing

This makes private companies ideal for foreign subsidiaries.

Naming Restrictions for Public Companies

Public companies face:

• Higher scrutiny on public-facing terms

• Restrictions on words implying state backing

• Greater sensitivity to investor protection

A name acceptable for a private company may be rejected for a public company.

Foreign Words, Global Brands, and Nepal Name Rules

Foreign companies often want to retain global brand identity.

This is possible, but regulated.

Use of Foreign Language Names

Foreign words are allowed if:

• They are clearly transliterated

• They do not mislead the public

• They align with permitted activities

OCR may request clarifications.

Global Brand Names

Using an existing international brand typically requires:

• Proof of ownership

• Board resolutions

• Trademark documentation

Without these, the name will be rejected.

Sector-Specific Naming Considerations

Some sectors attract extra review regardless of company type.

Highly Regulated Sectors

These include:

• Finance

• Healthcare

• Education

• Energy

Names implying authority or licensing will be rejected without prior approvals.

Technology and Consulting Firms

These sectors usually face fewer restrictions, making them popular for foreign entrants.

Private vs Public Company in Nepal: Name Reservation Comparison

This difference alone explains why most foreign investors choose private companies.

Practical Naming Strategies for Foreign Companies

Here is what works in practice.

Best-Practice Approach

1. Decide private vs public structure first

2. Avoid regulated or sensitive words

3. Keep the name aligned with actual activities

4. Prepare alternative name options

5. Ensure trademark alignment

What to Avoid

• Overly generic names

• Words implying government backing

• Mismatch between name and business scope

Common Reasons for Name Rejection in Nepal

Understanding rejection reasons saves time.

The most common causes are:

• Similarity to existing names

• Use of restricted words

• Misalignment with objectives

• Overstated claims

Foreign companies face higher scrutiny on all four.

How Name Reservation Affects FDI and Banking

Name approval is often checked again during:

• Foreign investment approval

• Bank account opening

• Licensing applications

If inconsistencies appear, authorities may require name amendments.

This is why name reservation is not a standalone step.

EEAT Perspective: Why This Guidance Is Reliable

This analysis is based on:

• Nepal’s Companies Act, 2006

• OCR procedural guidelines

• Practical FDI incorporation experience

• Observed approval and rejection patterns

These rules are applied consistently, even if not always published in detail.

Conclusion: Getting Name Reservation Right from Day One

Choosing between a private vs public company in Nepal is more than a structural decision.
It directly shapes how your company name is evaluated, approved, and used across regulatory systems.

For foreign companies, private company registration offers faster approvals and greater naming flexibility.
Public companies demand stronger justification and longer timelines.

A compliant, well-structured name sets the foundation for smooth incorporation, banking, and long-term operations in Nepal.

Frequently Asked Questions

Is company name reservation mandatory in Nepal?

Yes. Every company must reserve its name through the OCR before incorporation.

Can foreign companies use their global brand name in Nepal?

Yes, but ownership proof and supporting documents are usually required.

How long is a company name reserved in Nepal?

Name reservations are valid for a limited period and must be used promptly.

Are naming rules different for private and public companies?

Yes. Public companies face stricter naming scrutiny than private companies.

Can a rejected name be resubmitted?

Yes. You can revise and resubmit after addressing OCR feedback.