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.
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.
Before diving into name rules, it helps to understand how private and public companies differ at a structural level.
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.
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.
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.
Here is how the process works in practice.
The applicant submits a proposed name through the OCR’s online system.
Supporting details include company type and business objectives.
The system checks for:
Exact or close similarity
Restricted or sensitive words
This is not final approval.
OCR officers assess:
Legal compliance
Sector sensitivity
Public perception
This stage often causes delays.
If approved, the name is reserved temporarily.
If rejected, reasons are provided and resubmission is required.
The OCR follows strict internal guidelines.
A company name must:
Be unique and distinguishable
Reflect lawful business activities
Avoid exaggeration or deception
Match the company’s legal structure
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.
This is where many foreign founders get caught off-guard.
Private companies generally enjoy:
Broader naming options
Easier approval for descriptive terms
Faster processing
This makes private companies ideal for foreign subsidiaries.
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 companies often want to retain global brand identity.
This is possible, but regulated.
Foreign words are allowed if:
They are clearly transliterated
They do not mislead the public
They align with permitted activities
OCR may request clarifications.
Using an existing international brand typically requires:
Proof of ownership
Board resolutions
Trademark documentation
Without these, the name will be rejected.
Some sectors attract extra review regardless of company type.
These include:
Finance
Healthcare
Education
Energy
Names implying authority or licensing will be rejected without prior approvals.
These sectors usually face fewer restrictions, making them popular for foreign entrants.
| Aspect | Private Company | Public Company |
|---|---|---|
| Naming flexibility | High | Moderate to low |
| Approval timeline | Faster | Slower |
| Restricted words tolerance | More lenient | Strict |
| Brand adaptation | Easier | Heavily reviewed |
| Ideal for foreign firms | Yes | Only at scale |
This difference alone explains why most foreign investors choose private companies.
Here is what works in practice.
Decide private vs public structure first
Avoid regulated or sensitive words
Keep the name aligned with actual activities
Prepare alternative name options
Ensure trademark alignment
Overly generic names
Words implying government backing
Mismatch between name and business scope
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.
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.
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.
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.
Yes. Every company must reserve its name through the OCR before incorporation.
Yes, but ownership proof and supporting documents are usually required.
Name reservations are valid for a limited period and must be used promptly.
Yes. Public companies face stricter naming scrutiny than private companies.
Yes. You can revise and resubmit after addressing OCR feedback.