Nepal’s Company Act 2063 (2006) sets out mandatory compliance for all registered businesses. Under this law, foreign-owned companies (including branches, liaison offices or subsidiaries) must submit detailed filings to the Office of Company Registrar (OCR) and other authorities. The Act and related regulations require annual reports of meetings, audited financial statements, share allotment returns, statutory registers, and more. For example, Section 51 mandates an inventory of shareholders at each annual meeting, while Section 80 requires filing audited accounts with the OCR (within 6 months of fiscal year-end for private companies, or 30 days after the AGM for public companies).
Foreign investors should also note Nepal’s Foreign Investment and Technology Transfer Act (FITTA 2019) which operates alongside the Company Act. The Department of Industry regulates foreign investments, but after incorporation the Company Act governs ongoing filings. In practice, this means a new company must first submit its Memorandum and Articles of Association, director list, and any required government license to the OCR. Thereafter, the company must maintain records and file periodic returns. We cover each key filing below, with deadlines and references to the Act and official guidelines.
Before operations begin, every company must be duly registered with the OCR. This involves filing an incorporation application with documents such as the Memorandum of Association, Articles of Association, registration fee, and an undertaking by the first directors. If the company needs a government license (for example, an industry-specific or banking license), it must first secure the permit and then notify the OCR within 15 days of receipt. Public companies, once fully paid, must also apply for a business commencement permit (“Karobar Swikriti”) from the OCR (per Section 63 of the Act), certifying that capital requirements are met.
Foreign companies or investors must comply with Section 154–155 when registering. A foreign firm applying to establish a branch or liaison office must attach certified copies of its home-country charter, registration certificate, and board resolutions, as well as a Nepali translation. It must also name an authorized Nepalese agent (with power of attorney) to accept legal notices. Any amendments to these submitted documents must be notified within 35 days. In short, the Act requires full disclosure of the foreign parent’s identity, paid-up capital, objectives, and a local contact person.
Bullet List – Post-Incorporation Tasks: After registration, the company must:
Obtain any sector-specific licenses/permissions (and inform OCR)ocr.gov.np.
Get a Permanent Account Number (PAN) and register for VAT, as applicable.
Open a local bank account and deposit the paid-up capital.
Maintain statutory books and registers (e.g. share register, board minutes).
Plan the first Annual General Meeting (AGM) within 1 year (see next section).
One of the core obligations under the Act is holding an AGM and filing the outcome with OCR. Every company (public and private) must hold an AGM each year. Public companies must do this within six months after the fiscal year-end, typically by mid-January if the year ends in mid-July. Private companies also must hold annual meetings unless their Articles allow otherwise. AGM notice must be sent to shareholders at least 21 days in advance for public companies (private companies follow their Articles).
Agenda and Materials: At the AGM, the board must present the approved financial statements, auditor’s report, and proposed directors’ report. The directors’ report (required for public firms and large private firms) must cover business review, financial performance, board changes, dividend proposals, and other disclosures. Nepal’s Act explicitly requires discussion of profit/loss, cash flows, compliance and any auditor comments.
Pre-Meeting Filing (Section 78): Nepal’s law goes further than many countries by requiring a detailed pre-AGM report. Section 78 obliges companies to submit a report 21 days before the AGM containing specifics like shares issued, director/auditor details, large shareholders, loans, expatriate staff salaries, inter-company agreements, unclaimed dividends, and a statement of legal compliance. This comprehensive report must be board-approved and certified by the auditor. In practice, the OCR website and corporate guides instruct companies to forward this report 21 days before the meeting.
Post-Meeting Return (Section 80): Within 30 days after the AGM, a company must file a return of the meeting with OCR. This includes the number of shareholders present and copies of the financial statements, auditors’ report, directors’ report, and resolutions passed. Public companies file this AGM return (with all statements) automatically; private firms submit their audited financials to OCR within six months of year-end (even if no meeting is held). These strict deadlines are enforced: directors who default may face penalties (see “Penalties” below).
Example: If a private company’s fiscal year ends on Chaitra 15 (around April 1), it must hold its AGM and file audited accounts by Ashad 15 (mid-July) of the same year.
Nepal’s Company Act also mandates record-keeping and filings not always seen in other jurisdictions. One unique requirement is the inventory of shareholders under Section 51. Companies must prepare and maintain a register of all existing shareholders (and those who ceased to be) as of 30 days before the AGM. This inventory details authorized, issued and paid-up capital, calls on shares, paid installments, due payments, any forfeited shares (with reasons), loans, and names/addresses of directors.
After the AGM, this inventory (signed by a director) must be submitted to OCR within 30 days of the meeting. If any detail changes later (e.g. a share transfer after the inventory date), an updated record must be filed within six months of that change. Importantly, if a company already includes all these details in its Section 78 AGM report, it need not submit a separate inventory.
Statutory Books: In addition, every company must maintain statutory books (Section 47-50), including a share transfer register, register of directors, and minutes of all board/shareholder meetings. These records are kept at the registered office and must be made available for inspection by shareholders upon request.
Nepal’s Act requires annual audited financial statements for most companies. Per Section 109, every public company (and larger private firms) must prepare a balance sheet, profit and loss account, and cash flow statement each year. Private companies prepare the same statements, but have an extra deadline (within six months of year-end) rather than the 30-day AGM requirement. These statements must give a true and fair view of the company’s affairs, be board-approved and audited, and signed by the chairperson and a director. The audited accounts (plus the director’s report if applicable) must then be filed with OCR.
In practice:
Public companies: File full audited statements and directors’ report to OCR as part of the AGM return (30 days after AGM).
Private companies: File audited statements to OCR within 6 months after fiscal year-end.
For example, a company closing accounts on Baisakh 31 (mid-April) must submit audited statements by Ashad 31 (mid-July). In addition, large firms (public or capital ≥ NPR 10M or turnover ≥ NPR 100M) must include a detailed directors’ report with an assessment of business performance, industry outlook, board changes, and dividends.
Important: The company must also make the annual accounts available to shareholders. All audited financial statements and director reports are kept open for any shareholder to inspect.
Beyond meetings and accounts, the Company Act imposes other ongoing filing obligations:
Share Allotment (Section 31): After any new share issue or transfer, the company must file a Return of Allotment with OCR within 30 days. This return lists the number of shares issued, their nominal value, allottee names/addresses, and amounts paid or due on each share. If shares are allotted in consideration other than cash (e.g. services), the company must also file the contract or deed of transfer.
Changes in Directorship: Whenever directors or company secretaries are appointed or cease in office, the company must update its register and notify OCR via the annual return. (The Act itself emphasizes record-keeping; OCR rules require reporting director changes, though a specific section is not quoted above.)
Corporate Actions: Special resolutions (e.g. changing company name, increasing capital, buy-backs) must be included in meeting minutes and returns as required by Sections 13–14, 83, etc. Public companies issuing a prospectus must file it with OCR (Section 23) before capital is raised.
Statutory Registers: The Act mandates keeping registers (shareholders, directors, pledge of shares, etc.) and indexing shareholders. These registers themselves are not “filed” except as part of returns, but must be produced on request.
The table below summarizes main filings and deadlines:
| Filing Requirement | Applicable Companies | Deadline | Act Section |
|---|---|---|---|
| Share Allotment Return | All companies | Within 30 days of allotment | Sec. 31 |
| Inventory of Shareholders | All companies (before each AGM) | Within 30 days after AGM | Sec. 51 |
| AGM Report to OCR (pre-meeting Section 78) | All companies (esp. public) | 21 days before the AGM | Sec. 78 (explained in § above) |
| AGM Return & Financials (post-AGM Section 80) | Public companies | Within 30 days after AGM | Sec. 80 |
| Audited Financial Statements to OCR | Private companies (and large firms) | Within 6 months after FY end | Sec. 80 |
| Director’s Report | Public and large private companies | Included with audited accounts (as above) | Sec. 109 (board report) |
| Branch Office Registration | Foreign companies | At incorporation: submit license and parent docs | Sec. 155 |
| Foreign Co. Annual Report | Foreign branch/liaison offices | 6 months after FY: Nepal-specific accounts; 3 months after completion for parent accounts | Sec. 156 |
Foreign companies have some additional requirements under Chapter 16 of the Act. After registration, a foreign branch or liaison office must file separate financial statements to OCR. Specifically, Section 156 requires any foreign company registered in Nepal to prepare and audit annual accounts as if it were a Nepalese company, and submit them to OCR within six months of the fiscal year-end. These statements must detail assets in Nepal, cash balances, loans to/from residents, etc. Additionally, within three months of completion, the company must also send OCR a copy of its home-country audited financials and directors’ report for that year. Liaison offices (which cannot earn profit) must file an auditor-certified statement of salaries, allowances, tax deductions, rent and expenses by three months after year-end.
In short, foreign firms must treat their Nepal operation almost like a local subsidiary for accounting purposes, and also keep OCR informed of the parent company’s accounts. Section 155 (as noted) requires detailed submissions at registration (parent charter, Nepali contact, investment details, etc.). If any submitted document changes (e.g. a new director), the foreign company must notify OCR within 35 days. Failure to comply can lead to cancellation of the branch registration (Section 158) or fines under Section 81.
Jurisdiction Note: Unlike some Western systems, Nepal’s Company Act includes pre-AGM reports and detailed inventories. For example, India’s Companies Act (2013) and Nepal’s Act both require annual returns with auditors’ certificates, but Nepal uniquely requires the 21-day pre-AGM report. However, the overall framework – annual meetings, audited accounts, share registers – is broadly similar to other Commonwealth-based corporate laws.
The Company Act 2063 enforces filings through monetary penalties. Section 81 authorizes OCR to impose fines on defaulting directors or officers. The fines escalate with time and company size. For example, missing a deadline by up to 3 months can incur fines of NPR 1,000–5,000 (depending on capital). Longer delays (up to 6 months or more) attract higher fines (up to NPR 10,000 per day for very large firms). Even after six months, an annual fine (₹5,000–20,000 per year) can be levied until filings are done. OCR will restore a defunct company’s registration only after all fines are paid. In addition, Section 81 makes defaulting directors personally liable for late filings.
Key Point: Timely compliance is critical. Companies that neglect annual returns or omit documents can face crippling fines and legal action. To avoid penalties, follow each filing deadline (annual return, accounts, inventory, etc.) as specified by the Act.
In summary, Nepal’s Company Act, 2063 imposes a detailed schedule of filings for all companies, especially foreign-owned businesses. Key obligations include holding an AGM within the statutory deadline, submitting pre- and post-AGM reports (Sections 78 and 80), filing audited financial statements on time (Sec. 109/80), and keeping shareholder inventories (Sec. 51). Foreign branches must additionally file local and parent financials and keep OCR updated on their organizational details. Non-compliance carries stiff fines.
For foreign companies and NRN investors new to Nepal’s legal environment, the process can be complex. It’s advisable to work with local experts (accountants or legal counsel) to ensure each form is correctly filed on time. Take action: review your corporate calendar, note all deadlines under the Company Act, and if needed contact our team for a consultation on Nepal company law compliance. Our specialists can help you meet OCR requirements smoothly and avoid penalties.
Table: Key Filing Requirements Under Nepal’s Company Act
| Task | Public Companies | Private Companies | Foreign Branch/Liaison |
|---|---|---|---|
| Annual General Meeting (AGM) | Within 6 months of FY end | Within 6 months of FY end | N/A (no AGM for branch/liaison) |
| Pre-AGM Report to OCR (Sec. 78) | File detailed report 21 days before AGM | Same (if held AGM) | N/A |
| Post-AGM Return to OCR (Sec. 80) | File 30 days after AGM | File audited accounts within 6 months of FY | File audited local accounts within 6 months of FY |
| Annual Financial Statements | Audit & prepare 30 days before AGM | Audit & prepare within 6 months of FY | Audit & prepare with Nepal figures by 6 months, submit |
| Directors’ Report / Board Report | Required (see Sec. 109) | Required if capital/turnover thresholds met | Not required by Company Act |
| Inventory of Members (Sec. 51) | File inventory within 30 days after AGM | Same | N/A |
| Change in Directors/Registered Office | Notify OCR in annual return | Notify OCR in annual return | Notify OCR of address/directors changes (35 days) |
| Foreign Investment Filings | N/A | N/A | At registration: submit license, charter, Nepali rep. |
People Also Ask:
What filings are required under the Company Act in Nepal?
Companies must file share allotment returns, shareholder inventory, audited accounts, and AGM reports with OCR. Specifically, Sections 31, 51, 78 and 80 of the Act mandate filings of share allotment, AGM reports, and annual financial statements to the Registrar.
When must a company file its audited financial statements in Nepal?
Private firms must file audited accounts within six months after year-end. Public companies prepare accounts 30 days before the AGM and submit them with the AGM return (within 30 days post-AGM).
What is the deadline for filing an annual return in Nepal?
The annual return (return of AGM) must be filed within 30 days of the AGM. If an AGM was not held, private companies still file their financial statements within 6 months of year-end.
What documents must a foreign company submit to Nepal’s Company Registrar?
A foreign company must provide its home-country registration documents, Nepalese translation, board resolution authorizing Nepal operations, and details of directors and authorized Nepali agent. On-going, it must file local audited accounts and parent-company audited financials under Section 156.
What are penalties for failing to file required returns?
Directors who miss filing deadlines face fines under Section 81. Initial default (up to 3 months late) can cost NPR 1,000–5,000, longer delays raise penalties (up to NPR 20,000 per year after six months). OCR can also cancel a company’s registration until fines are paid.