A multipurpose company is a business entity established to operate in multiple industries and conduct businesses of diverse natures simultaneously. This structure provides flexibility for entrepreneurs who wish to diversify their operations or keep options open for future business expansion.
Key differences between multipurpose and single-purpose companies:
Multipurpose Company:
Allows operations across different industries and sectors
Provides flexibility to add new business lines without major structural changes
Requires adding descriptors such as “MULTIPURPOSE,” “MULTI BUSINESS,” or “MULTI TRADE” to the company name during registration
Useful for conglomerates, investment holding companies, and entrepreneurial ventures planning diverse operations
May face fewer restrictions when expanding into new business areas
Single-Purpose/Specific-Purpose Company:
Restricted to conducting business activities of a related nature only
More focused operational scope with clearly defined objectives
Name reflects the specific industry or business purpose
May be preferred when demonstrating specialization to stakeholders or clients
Typically requires formal amendments to the memorandum of association if business scope needs to change
Both structures are valid under Nepali law. Your choice depends on your business strategy, growth plans, and operational needs. Multipurpose registration is particularly beneficial if you anticipate diversification or wish to maintain flexibility for future ventures.

Understanding these three business structures is crucial when deciding how to establish your business in Nepal.
Company:
A separate legal entity distinct from its owners and shareholders
Has its own legal personality, assets, and liabilities
Limited liability protection for shareholders and owners
Requires formal registration with the Office of the Company Registrar
More complex compliance and reporting requirements
Can be sued and can sue in its own name
Perpetual existence independent of individual ownership changes
Proprietorship Firm:
A business structure where the owner and the business are legally the same entity
No separation between personal and business liabilities
The owner bears unlimited personal liability for business debts and obligations
Simpler registration and lower compliance requirements
Income and assets are considered personal property
Cannot continue legally after the owner’s death without re-registration
Easier to establish and maintain with minimal bureaucratic procedures
Industry:
A specific establishment set up primarily for manufacturing or producing goods or products
Can operate as a company, proprietorship, or partnership structure
Subject to additional regulations from industrial boards and environmental authorities
Requires specialized licenses and certifications depending on the industry type
May have specific requirements for factory setup, machinery installation, and safety compliance
Typically involves more capital investment and infrastructure requirements
Key Advantages of Registering a Company over a Proprietorship:
Limited liability protection shields personal assets
Enhanced credibility and trust with business partners, lenders, and investors
Easier access to business loans and credit facilities
Better for long-term succession planning and business continuity
Professional image and tax advantages in many cases
Ability to raise capital through equity financing
Legal permanence independent of individual circumstances

Yes, technically you can register a company independently if you possess thorough knowledge of Nepali company law, the Companies Act 2063, and the detailed procedural requirements. Self-registration is possible through the Office of the Company Registrar.
However, we strongly recommend consulting with an experienced lawyer or business consultant for several important reasons:
Benefits of Professional Consultation:
Ensures all legal documentation is properly drafted and compliant
Helps avoid costly mistakes that could invalidate registration or create future complications
Provides personalized advice based on your specific business structure and goals
Ensures proper structuring of ownership, liability, and governance
Saves significant time and reduces back-and-forth with the registrar
Helps identify potential legal pitfalls before they become problems
Ensures your company documents (Memorandum and Articles of Association) are comprehensive and well-drafted
Provides guidance on tax implications and optimal business structure
What Self-Registration Requires:
In-depth understanding of the Companies Act and related regulations
Knowledge of proper documentation and certification procedures
Familiarity with current government requirements and filing processes
Ability to prepare legally sound Memorandum and Articles of Association
Understanding of shareholder agreements and governance structures
Many entrepreneurs who attempt self-registration without proper knowledge end up facing rejection, having to resubmit documents, or creating legally weak company structures. Professional consultation typically costs far less than fixing problems later.

Company registration alone does not authorize you to conduct any business operation. Registration is only the first step in establishing a legal business entity. There is a crucial distinction between company registration and business authorization that many entrepreneurs misunderstand.
The Two-Step Process:
Step 1: Company Registration (Office of Company Registrar)
Creates the legal entity and corporate structure
Establishes ownership, governance, and management framework
Provides corporate identity and trademark
Step 2: Industry/Sector-Specific Registration and Authorization
Required from relevant regulatory bodies and government divisions
Specific to your actual business operations
Mandatory before commencing business activities
Sector-Specific Requirements:
Media and Broadcasting:
Must register with Press Council Nepal for print media
Department of Information and Technology for online/digital media
Nepal Telecommunications Authority for broadcasting licenses
Obtain necessary permissions before publishing or broadcasting content
Financial Services:
Banks: Nepal Rastra Bank (NRB) licensing and requirements
Insurance: Insurance Board of Nepal registration and approval
Securities: SEBON (Securities Board of Nepal) for investment/trading companies
Healthcare:
Department of Health Services registration for clinics and hospitals
Medical Council of Nepal for individual practitioner registration
Specific licensing for pharmaceutical companies
Manufacturing:
Department of Industries registration
Environmental compliance certificates from Ministry of Forests and Environment
Factory registration with respective district administration
Specific licenses based on product type (food, chemicals, etc.)
Real Estate and Construction:
NRRP (Nepal Real Estate Regulatory Board) if operating as real estate company
Construction company licensing (discussed in detail below)
Municipal government approval for project development
Hospitality:
Tourism Board registration for hotels and resorts
Liquor licensing for bars and restaurants
Municipal permits and compliance
Import/Export:
Customs and Excise registration
Trade license from municipality
Specific commodity permits depending on goods
Education:
Department of Education registration
School Management Committee formation
Curriculum approval from NEB or NCES
Retail and General Commerce:
Local municipal trade license
VAT/PAN registration with IRD
Specific licenses for controlled items (alcohol, tobacco, etc.)
Why This Two-Step Process Exists:
Ensures businesses meet industry-specific safety, quality, and ethical standards
Protects public interest and consumer safety
Allows specialized regulatory bodies to monitor compliance
Prevents unqualified individuals from operating in regulated sectors
Timeline Consideration:
Company registration typically takes 5-10 working days
Industry-specific authorization can take weeks to several months depending on sector
Plan accordingly and apply for sector licenses immediately after company registration

Construction companies in Nepal operate under specific regulatory frameworks and have distinct registration requirements compared to other business types. Understanding these requirements is essential before establishing a construction business.
Initial Company Registration:
Register your company with the Office of Company Registrar as a regular private or public limited company
Include construction-related objectives in your Memorandum of Association
The company name should reflect construction operations
Construction Industry Specific Requirements:
Contractor License: After company registration, you must obtain a contractor license from the appropriate government authority. This is separate from company registration and authorizes you to conduct construction operations.
License Classification System: Nepal uses a letter-based classification system for construction contractors:
A Class: Highest tier, unlimited project value
B Class: Large projects, higher financial capability required
C Class: Medium-sized projects
D Class (GHA Barga): Entry-level classification, limited project scope
G Class (Specialized): For specialized construction services
Starting with D Class License: Most new entrepreneurs begin with a “D” class license, which:
Is the entry point for construction contracting
Allows participation in government and private projects within specified value limits
Requires lower financial guarantee compared to higher classes
Can be upgraded to higher classes as you gain experience and financial capacity
Demonstrates that you meet minimum capability standards
D Class License Requirements:
Registered company with clear construction objectives
Proof of financial capability and bank balance
Office space (lease agreement and office setup)
Minimum number of technical personnel (engineers/supervisors)
Equipment list and ownership documentation
Experience documentation (if applicable)
Insurance coverage for equipment and operations
Licensing Authority:
National Projects: Central Level Engineering Council or respective ministry
Local Projects: District Administration or municipality
Process for Obtaining Construction License:
Prepare all required documentation and technical specifications
Submit application to relevant authority with supporting documents
Verification of office, equipment, and personnel
Assessment of financial capability
Approval and issuance of contractor license
Renewal requirements (typically annual)
Upgradation Path:
As your company gains experience and financial strength, you can upgrade to C, B, or A class
Higher class licenses allow access to larger projects with higher contract values
Upgradation requires updated financial statements and completion of minimum project values
Additional Requirements:
Enrollment in contractors’ association (optional but recommended)
Professional liability insurance
Compliance with safety regulations and standards
Environmental clearance for specific project types
Labor registration and compliance
Our Support: We can assist you in:
Preparing comprehensive company documentation
Guiding through the contractor license application process
Documenting your financial capability
Ensuring compliance with all regulatory requirements
Managing the upgradation process as your business grows

A private limited company in Nepal can have a maximum of 101 shareholders as per current regulations (updated in 2075 BS).
Important Details About Shareholder Limits:
Historical Context:
Previous regulations limited private companies to 99 shareholders
The limit was increased to 101 shareholders to provide more flexibility
This remains the current legal maximum under the Companies Act 2063
Definitions and Distinctions:
Shareholder vs. Director:
Shareholders are the owners who hold shares/equity in the company
Directors are individuals who manage and make decisions for the company
One person can be both a shareholder and director
Maximum of 101 shareholders does not limit the number of directors
Minimum Shareholder Requirements:
A private limited company must have at least 1 shareholder
However, most companies have at least 2 to demonstrate multiple ownership
Exceeding the Limit:
If you want to have more than 101 shareholders, you must convert to a public limited company
Public limited companies have no maximum shareholder limit
Conversion requires formal amendment and regulatory approval
Private Limited Company Characteristics:
Limited to 101 shareholders
Cannot publicly trade shares
More privacy and control compared to public companies
More suitable for family businesses and closely-held ventures
Simpler governance structure
When to Consider Public Limited Company:
Planning to raise capital from numerous investors
Requiring more than 101 shareholders
Planning for eventual public listing
Seeking external investment
Family business planning succession with many heirs
Shareholder Management Considerations:
Each shareholder has voting rights proportional to their shares
Shareholder agreements should clearly define rights and obligations
Regular shareholder meetings are required
Decisions require majority or unanimous consent depending on matter type
Maintain accurate share register and shareholder records

Disclosing a registered office address is a mandatory requirement during company registration. Your address serves as the official legal address for all government communications, legal notices, and official correspondence. Understanding address requirements helps ensure smooth registration and future compliance.
Address Disclosure Requirement:
What You Must Provide:
Ward number where you intend to establish the company office
Specific location details or street address
This becomes your company’s registered office address
Government will send all official communications to this address
During Company Registration:
You do NOT need to provide a formal rent agreement
Providing the ward number is sufficient for registration purposes
The registrar needs to know the jurisdiction and location, not the rental proof
Later, During VAT/PAN Registration:
At the Inland Revenue Department (IRD), requirements are stricter
You MUST provide a rent agreement for the office address
The rent agreement establishes your business presence for tax purposes
Landlord’s name and signature are required on the agreement
Office at Your Own House:
Creating a Rent Agreement for Your Own Property: Since a private limited company is a separate legal entity distinct from its owners, even if you operate from your own house, you must create a formal rent agreement. This agreement establishes the relationship between the landlord (property owner) and the company (separate entity).
Rent Agreement Structure:
Party 1 (Landlord): You, as the property owner
Party 2 (Tenant): The company (a separate legal entity)
Either you personally or any shareholder can sign on behalf of the company
Must specify monthly/annual rent amount (can be nominal)
Should include standard rental terms and conditions
Must be dated and signed by both parties
Why This is Required:
Maintains the legal separation between you (individual) and the company (entity)
Demonstrates legitimate business use of residential property to authorities
Provides documentation for tax and compliance purposes
Protects both your personal interests and company interests
Satisfies IRD requirements for VAT/PAN registration
Considerations for Home-Based Businesses:
Check local municipal regulations on home-based commercial operations
Some areas restrict commercial activity in residential zones
Neighborhood associations or landlords may have restrictions
Ensure the rent agreement complies with local zoning laws
Keep the rent agreement in your company records
Practical Address Options:
Option 1: Commercial Office Space
Standard rent agreement with external landlord
Professional business image
Full compliance with all regulations
Higher rental costs
Option 2: Shared Office Space
Rental agreement with shared office provider
Lower costs than dedicated office
Professional address without full space commitment
Suitable for startups and small businesses
Option 3: Home-Based Operation
Rent agreement between property owner and company
Lowest operational costs
Legitimate if done with proper documentation
Must maintain separation between residential and business use
Option 4: Business Registration Address Service
Use a professional service provider’s address
Company receives mail forwarding services
Suitable for businesses with minimal physical presence
Verify IRD acceptance in your specific case
Important Compliance Notes:
Keep original rent agreement in company records
Maintain correspondence showing business operates at declared address
Update address with relevant authorities if you relocate
Ensure rent agreement remains valid throughout company operation
Address changes require formal notification to the registrar

Essential Documents to Prepare:
Personal identification (Citizenship or Passport)
Address proof
PAN and tax information
Detailed description of business activities
Proposed office address with ward number
Shareholder and director information and documents
Initial share capital details and distribution
Proposed company name (3-4 alternatives)
Professional Consultation Recommendation: We recommend consulting our legal professionals to ensure all documentation is properly prepared and to discuss the optimal structure for your business needs.