If you are a foreign company entering Nepal, the Company Act Nepal will shape every legal step you take. Within the first stage of incorporation, two documents carry the greatest legal weight: the Memorandum of Association (MOA) and the Articles of Association (AOA).
These documents are not paperwork formalities. They define your company’s identity, authority, governance, and risk exposure in Nepal. Errors or boilerplate drafting can delay registration, restrict operations, or create long-term compliance issues. This guide explains MOA and AOA clearly, practically, and from a foreign investor’s perspective.
The Company Act Nepal governs how companies are formed, managed, regulated, and dissolved in Nepal. All companies registered with the Office of the Company Registrar must submit an MOA and AOA that comply with this Act.
Under the Company Act Nepal, the MOA and AOA must:
Be consistent with Nepalese law
Clearly define business scope and governance
Protect shareholders, directors, and third parties
Be filed, approved, and publicly accessible
Once registered, these documents become legally binding.
The MOA is the company’s constitutional charter. It defines what the company is allowed to do.
Under the Company Act Nepal, an MOA must include:
Company name
Registered office address in Nepal
Objectives of the company
Authorized share capital and share structure
Liability of shareholders
Details of promoters and shareholders
If an activity is not clearly stated in the MOA, it is legally restricted.
The AOA governs how the company operates internally.
The AOA typically regulates:
Board structure and powers
Appointment and removal of directors
Share transfer rules
Voting rights and quorum
Dividend declaration
Meetings and resolutions
Conflict management
Think of the MOA as what you can do and the AOA as how you do it.
| Aspect | MOA | AOA |
|---|---|---|
| Legal role | Defines company scope | Defines internal governance |
| Mandatory filing | Yes | Yes |
| Public access | Fully public | Public |
| Limits business activities | Yes | No |
| Regulates board powers | Limited | Extensive |
| Flexibility | Low | Moderate |
| Risk of poor drafting | Operational restriction | Governance disputes |
Original insight:
Most foreign companies face problems not during registration, but two to three years later, when expansion plans exceed the MOA scope or when unclear AOA clauses trigger shareholder deadlocks.
Foreign investors often copy MOA templates. This is risky under the Company Act Nepal.
Narrow or outdated business objectives
Missing ancillary activities
Conflict with FDI approval conditions
Inflexible capital clauses
Draft an MOA that:
Anticipates expansion
Aligns with FITTA and sector approvals
Covers related and future activities
Allows capital restructuring
The Company Act Nepal allows flexibility in AOA drafting. This is where foreign investors should negotiate protection.
Reserved matters requiring investor consent
Director nomination rights
Deadlock resolution mechanisms
Exit and share transfer controls
Dividend repatriation processes
A strong AOA reduces disputes and protects control.
MOA focuses on operational flexibility
AOA ensures investor control
MOA aligns objectives of partners
AOA becomes the most critical risk document
MOA and AOA are not used
Parent documents apply instead
Name approval
Draft MOA and AOA
Promoter signatures
Online submission to OCR
Registration approval
PAN and tax registration
Errors in MOA or AOA can restart the process.
Requires shareholder approval
OCR approval mandatory
Public notice often required
Board or shareholder resolution
Faster approval
More flexibility
Foreign companies should plan amendments strategically.
Ultra vires activities
Director liability
Shareholder disputes
Regulatory penalties
Difficulty in exit or repatriation
Most of these risks originate from poorly drafted MOA or AOA.
Before finalising MOA and AOA, confirm:
Objectives allow future growth
Governance aligns with investment agreements
FDI conditions are mirrored
Exit rights are protected
Dispute mechanisms are defined
Yes. Every company must file an MOA at incorporation. Without it, registration is not legally valid.
Yes, but amendments require shareholder approval and OCR consent. Planning early avoids delays.
Activities may be deemed ultra vires. Contracts can become unenforceable under Nepalese law.
Yes. The Company Act Nepal requires AOA to regulate internal governance.
Yes. The Act allows flexibility, especially for investor protection and governance controls.
Under the Company Act Nepal, MOA and AOA are the legal backbone of your Nepal entity. For foreign companies, these documents determine operational freedom, investor control, and long-term compliance.
Treat them as strategic instruments, not templates.
Planning to register a company in Nepal or restructure an existing one?
Speak with our Nepal corporate law and FDI specialists to draft investor-ready MOA and AOA aligned with the Company Act Nepal and FDI regulations.