Company registration requirements and procedure for Nepali Citizens

INCORPORATION PROCEDURES AND REQUIRED DOCUMENTS

1^st Stage: INCORPORATION OF COMPANY:

The following Documents are to be prepared and obtained and submitted to OCR for the incorporation of the company. 

1. 2 copies of MOA (Memorandum of Association)
2. 2 copies of AOA (Article of Association)
3. Copy of notarized citizenship of the Founder/Shareholders
4. Letter for registration of Company
5. Power of Attorney (POA) to proceed with the application in Office of Company Registrar (OCR)s

Required Information for Preparing MOA/AOA:

1. Name of the Company
2. Shareholders Details
3. Address of the Company
4. Objectives of the company
5. Capital Structure
6. Shareholding Ratio
7. No. of directors, their tenure and name

Procedure

1. Proposed company name is reserved at OCR website
2. Online submission of documents stated above after the reserved company name is approved.
3. Submit the said documents at OCR for registration process.

NOTE:

• As per the law registration of a company takes place within 1 month, which can vary as per the situation.
• Registration  fee is determined on the basis of Capital of a company, which is as follows:

S.N.	Capital	Registration  fees
1.	1 lakh	1,000
2.	1 lakh 1 rupees – 5 lakh	4,500
3.	5 lakh 1 rupees – 25 lakh	9,500
4.	25 lakh 1 rupees – 1 crore	16,000
5.	Above 1 crore  (per crore)	3,000

2^nd Stage (ACQUIRING PAN/VAT)

Documents required at this stage are as follows:

1. Minute for obtaining PAN (which determines whose name the PAN will be registered under and his/her photo)
2. Copy of Lease Agreement of the company in which its office is planned to be situated.
3. Citizenship of house owner
4. Citizenship of founder of a new company
5. Seal (Stamp) of the new company
6. Letter from OCR confirming the Company’s registration (original)
7. Letter from OCR confirming reservation of PAN number
8. Copy of company registration certificate.
9. 2-3 copies of pp size photographs of the authorized personnel of the new company
10. Application form in the prescribed format
11. Sell and Purchase Book (for VAT)
12. Application for acquiring username and password (for VAT)

PROCEDURE:

• To obtain PAN/VAT, documents stated above needs to be submitted at respective Inland Revenue Office (IRD) and follow the procedure stated then and there.
• After obtaining user name and password, go to the IRD website and change the Password for your VAT filling. (if registered in VAT)

NOTE:

• VAT filing of a company can be done through online using given username and password
• VAT needs to be filled (online) every month even if the company has 0 sells and purchase
• Tax needs to be filed at the end of every financial year that is within the end of the Nepali month Asar.
• Failure to file tax at the time stipulated shall be imposed fine depending upon the operation of the business.
• Consult Auditor for any tax related work.

3^rd Stage (Open Bank Account):

Open bank account in the name of a company and deposit individually agreed share amount. There is no time limitation for payment of the share amount. However, it needs to be paid if there is call on share amount.

Required Documents for opening Bank Account:

• Minute of a company determining when and in which Bank Company will be opening bank account.
• Application from in the prescribed format
• Copies of AOA and MOA of a company
• Copy of Company registration certificate
• Citizenship of founder
• Copies of PAN Certificate

Note: Documents required may vary from bank to bank.

Things to be followed after the incorporation is done:

1. Submit Initial Compliance (suru awasta ko jankari) within 3 months of incorporation of a new company (Submit online at OCR).  Subjects to be included in Initial Compliance:

• Auditor name
• Address of a new company
• To call on shares
• And others as per requirements of the company.

1. Failure in submission of initial shall be imposed with fine on daily basis.
2. Prepare share registry book (share lagat) as per the agreed share unit.
3. First Annual General meeting (AGM) of a company should be done within 1 year of commencement of a company, while AGM of subsequent year shall be conducted within the end of the Poush month.