Many business owners in Nepal confuse Tax Compliance (IRD) with Company Compliance (OCR). You might have your Tax Clearance Certificate in hand, but if you haven’t submitted your Annual Returns and Auditor’s Reports to the OCR, your company is technically non-compliant. The result? Fines that compound annually, turning a manageable administrative fee into a debt of lakhs.
Interactive Penalty Calculator
Use this tool to estimate your potential liability under Sections 51, 78, 120, 131, or 156 of the Companies Act.
Calculate Your Fine
*Excludes additional NPR 200/mo document retention fines. Use this calculator as reference only, fines and penalties change over time. Visit OCR office Contact us to get the exact amount.
1. The Penalty Tiers (Detailed Breakdown)
The Government of Nepal has structured penalties based on the financial capacity of the company. The “Authorized Capital” is irrelevant here; fines are based on Paid-Up Capital.
Tier A: The “Small Business” Bracket
Applicable for: Paid-up Capital up to NPR 2,500,000 (25 Lakhs)
This covers most startups, small consultancies, and single-shareholder companies. While the initial fines are low, the NPR 5,000 per year cap for long-term delays is where most dormant companies get trapped. If you haven’t updated for 5 years, you owe NPR 25,000 straight away.
- 0-3 Months Delay: NPR 1,000
- 3-6 Months Delay: NPR 1,500
- 6-12 Months Delay: NPR 2,500
- Over 1 Year: NPR 5,000 (Per Fiscal Year)
| Company Tier | Initial Fine (3 Mo) | Medium Delay (6 Mo) | Long Term (1 Year+) |
|---|---|---|---|
| Tier B: Medium Capital up to 1 Crore |
NPR 2,000 | NPR 5,000 | NPR 10,000 / year |
| Tier C: Large Capital above 1 Crore |
NPR 5,000 | NPR 10,000 | NPR 20,000 / year |
| Non-Profit Distributing Section 166 Companies |
NPR 2,000 | NPR 5,000 | NPR 10,000 / year |
2. The “Hidden” NPR 200 Monthly Fine
This is the most misunderstood part of the Companies Act. The standard fines listed above apply to the Annual General Meeting (AGM) and Audit Report submission.
However, if the OCR requests specific documents—or if you fail to submit the Shareholder Register (Lagat) updates within the stipulated time—an additional fine kicks in.
If a document is not submitted within 1 month of the deadline -> Add NPR 200 per month.
Example: You are 2 years late on a document.
24 Months x NPR 200 = NPR 4,800 Extra Fine on top of the standard penalty.
3. Common Triggers for Fines
Why do companies get fined? Usually, it’s not malicious; it’s administrative oversight. Here are the top three reasons companies in Nepal incur OCR debt:
A. The “Zero Transaction” Trap
Myth: “My company didn’t do any business this year, so I don’t need to audit.”
Reality: You must appoint an auditor, create a “Nil Report,” pass it through an AGM, and file it. Zero transaction companies are legally required to file just as strictly as multinational corporations.
B. The AGM Delay
According to the Act, your AGM must be held within 6 months of the fiscal year-end (usually by Poush end). If you hold your AGM in Magh or Falgun, the OCR system automatically flags a “Section 81 Violation” when you upload the minutes.
C. Address Changes
Moving your office from Ward 10 to Ward 32? If you don’t file the address change notice within 1 month, the NPR 200/month counter starts ticking.
4. How to Pay and Clear Fines
The days of visiting a bank counter with a physical voucher are fading. Here is the modern workflow:
- Login to OCR System: Access your company dashboard via the official OCR portal.
- Upload Documents: Upload your AGM minutes and Audit Report. The system will detect the dates.
- Auto-Calculation: The system will generate a “Fine Slip” automatically if the dates indicate a delay.
- Payment: You can pay via ConnectIPS directly from the portal or print the voucher to deposit at Everest Bank / Nepal Rastra Bank.
5. Is This Fair? The “Zombie Company” Trap
A common question we receive from business owners is: “Why are the fines so high for a company that isn’t even making money?”
To understand the risk, you must understand the unique legal philosophy of Nepal’s Companies Act compared to the rest of the world. While most countries operate on a “Comply or Die” model, Nepal operates on a “Comply or Pay” model.
🧟 The “Zombie Company” Phenomenon
In jurisdictions like the UK or Singapore, if you stop filing for 2 years, the Registrar assumes you are defunct and forcibly closes (strikes off) your company. The company “dies,” and the liability ends.
In Nepal, the company never dies.
Without a forced strike-off mechanism, a dormant company in Nepal stays “alive” in the database forever, accumulating fines year after year. A startup you registered in 2015 and forgot about is not “closed”—it is a “Zombie Company” currently accruing a debt of NPR 3,00,000+ that you will eventually have to pay to clear your name.
Global Context: Nepal vs. The World
Is Nepal’s policy strictly punitive? Surprisingly, in some aspects, it is lenient. While the financial cost is high for dormant companies, the legal consequences for directors are milder than in neighboring countries.
| Country | Late Fee Model | Consequence | The “Exit” Route |
|---|---|---|---|
| 🇳🇵 Nepal | Accumulative Fines stack yearly forever. |
Financial Debt. Company cannot be closed or updated without payment. |
Difficult. Must pay all back-fines to deregister. |
| 🇮🇳 India | Exponential Fees multiply (up to 12x). |
Director Ban. Directors can be disqualified for 5 years. |
Moderate. Registrar can strike off companies. |
| 🇬🇧 UK | Fixed Capped escalation (£1,500). |
Criminal. Prosecution and criminal record for directors. |
Easy. Auto-strike off for non-filers. |
Frequently Asked Questions (FAQ)
Is Your Company Status “Frozen”?
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