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Step-by-step Procedure to Transfer Shares of a Private Limited Company in Nepal

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Are you looking to transfer shares of a private limited company in Nepal? Transferring shares is a common occurrence in the business world, and it is important to understand the process to ensure a smooth transfer of ownership. In this article, we will guide you through the steps required to transfer shares of a private limited company in Nepal.

Step 1: Obtain a Transfer Deed

The transfer of shares in a private limited company in Nepal requires a transfer deed to be executed between the transferor and the transferee. The transfer deed is a legal document that outlines the terms and conditions of the transfer and should be in writing. It is essential to note that the transfer deed should be executed on stamp paper to make it legally binding.The deed must be verified by a registered lawyer.

Step 2: Obtain Necessary Approvals

The transfer of shares in a private limited company requires the approval of the company’s Board of Directors. The transferee should submit a written request to the Board of Directors seeking their approval for the transfer of shares. Once the Board of Directors approves the transfer, the transferor, and transferee can proceed with the transfer.

Step 3: Register the Transfer with the Company Registrar

After obtaining the necessary approvals, the transfer of shares should be registered with the Company Registrar in Nepal. The transferor and the transferee should submit the transfer deed along with other necessary documents, such as proof of identity and address of both parties, to the Company Registrar. It is important to note that the transfer deed should be stamped before registering with the Company Registrar. The company should submit board meeting minutes with resolution to agree on share transfer and proof of payment made by the buyer to seller. Buyer can provide a bank statement showing the transfer of fund to the seller.

Step 4: Update the Company’s Register of Shareholders

Once the transfer of shares is registered with the Company Registrar, the company should update its register of shareholders to reflect the change in ownership. This step is crucial to ensure that the transferee is recognized as the new owner of the shares. OCR officials will inspect the transfer and documentation and provide government seal to the documents.

In conclusion, transferring shares of a private limited company in Nepal involves a few critical steps that must be followed to ensure a smooth transfer of ownership. By obtaining a transfer deed, necessary approvals, registering the transfer with the Company Registrar, and updating the company’s register of shareholders, investors can transfer shares without any legal issues. We hope this guide has been helpful in understanding the process of transferring shares of a private limited company in Nepal.

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