Company registration is a fairly easy and quick process if you have a good consultant. Many business consultancies that provide company registration service create a company for you and hand over all the documents and vouchers. Now it is the responsibilities of business owners to carry out post-registration services.  However, most small businesses can’t/won’t hire an accountant or lawyer in their initial phase so things can get a little thicker. However, we at bizsewa provide these post-registration services as well as our tagline suggests, “One-Stop Business Solution”. So, what are the obligations that a newly registered company has or what are the legal and regulatory requirements after successfully registering a company? We have created a compact yet comprehensive list that provide you with sufficient information.

1. Registration with Tax Authorities:

All businesses registered at any authorities should compulsorily take Permanent Account Number (PAN) to start and continue their operations. With the company, OCR (Office of The Company Registrar) provides you with a letter containing a PAN number that is reserved for your company.

Before visiting the  Inland Revenue Department (IRD) a.k.a Kar Karyalaya, you need to make sure you have these documents/things with you:

  1. Photocopy of Certificate of registration, MOA and AOA (Prabandhapatra, Niyamawali)
  2. Original letters provided by OCR
  3. Stamp of the company (Please include the full name of the company in the stamp)
  4. Minutes of board meeting deciding the registration at IRD (MINUTES SAMPLE)
  5. Photocopy of Citizenship certificates of all shareholders
  6. Two PP size photos of any shareholder (the name of that Shareholder must be stated in the minutes)
  7. Personal PAN card of one shareholder
  8. Rent Agreement (RENT AGREEMENT SAMPLE)
  9. Submission number of online form filled at IRD website.
  10. Copy of citizenship/ Receipt of payment for any government service by the landlord. (electricity / khanepani )
  11. Application for PAN registration (with Rs.10 stamp)

These documents must be filed in a document file and submitted at the IRD office of your ward that is specified at the company registration documents. In Kathmandu, almost all wards have their own IRD offices however in other places, there is a single IRD office for the municipality or district.

It is also mandatory to display a copy of the PAN certificate and company registration certificate at your office for public view. We recommend creating a colour photocopy and framing it just in the reception area.

Please note that a company with the annual transaction exceeding NPR 50 lakh and service provider with annual transaction exceeding NPR 20 lakh must also get registered under Value Added Tax (VAT). The PAN number remains the same. Also, there are various businesses/industries that require compulsory VAT registration irrespective of their transaction volume. Details here:

2. Obtain licenses, permissions required to conduct your business:

Certain businesses and industries require to obtain license or permissions from their respective departments or bodies which regulate those businesses. If your business requires additional license/permission or registration for operation, please obtain that as well.

For example, if you register a travel and tourism company, you must get a tour license from the Department of Tourism. Similarly, a construction company requires a license to bid in tenders, the liquor seller needs to get registered at excise, Online shop should register at Small and Cottage Industry department and so on.

3. Opening of Bank Account:

After you obtain PAN certificate, you must open a bank account immediately. We advise all businesses to conduct their transactions through their bank account be it collecting share capital, paying suppliers or salary to your staff. To help to track the finances, keep the transparency and financial discipline, limit the use of cash, except for petty expenses or where it is not possible.

Please carry these documents/ things while visiting the bank to open an account for your company:

  1. Photocopy of Certificate of registration, MOA and AOA (Prabandhapatra, Niyamawali)
  2. Stamp of the company
  3. Rent Agreement
  4. Minutes of board meeting deciding to open a bank account at the specified bank
  5. Photocopy of Citizenship certificates of all shareholders
  6. PP size photos of all shareholders (this can be attached to the KYC form)
  7. KYC (Know your Customer) filled by all the shareholders. For most of the banks, you can download the KYC form from their website.

Before opening the bank account here are a few things that all business owners should know:

1. You can have signatories (the person who is authorized to sign on cheques or other documents) other than shareholders as well.

2. You can have condition-based signatories. This means you can specify one person as a signatory but for cheques of amount more than say, Rs 1,00,000, any two of the three people specified must sign the cheque or so. Some of the most common types of permissions held by authorized signers on business accounts are:

  • Ability to sign checks/cheques
  • Access to an account’s balance
  • Access to transactions history
  • Ability to cancel payments on checks/cheques
  • Ability to close the account

For each signatory, you can give access or restrict any of these permissions.

4. Submit Details to Office Of Company Registrar Office (OCR) within 15 days and three months:

Within 15 days of registration of company, you need to submit the details about appointment of auditor and his/her fees. The appointment is done by passing the resolution at shareholder’s meeting.

You must send various details about your company to OCR after registration of the company within three months of the completion of registration.  This includes

  • The exact address of the registered office of the company within three months of registration (Annexure 184).
  • Details of share allotment.
  • Source of Income of each shareholder.
  • Appointment of auditor by the board for the first year specifying the audit fee.

5. Obtain a share certificate from OCR within one month of submitting the initial documents:

Within one month of submitting the share allotment documents, you need to obtain share certificates authorized by OCR. To obtain share certificates, you need to provide a bank statement of your company showing the deposit of a sum equal to the allotted shares. You can use this sum to operate the business. (FIXED DEPOSIT IS NOT REQUIRED). If any shareholder wishes to provide any other assets other than cash, you can have that as well. For example, if a Shareholder wishes to obtain a certificate by giving the land of equivalent shares, he/she should transfer the ownership of the land to the company and provide those documents as well. Be informed that OCR charges fine if you don’t obtain the certificate in time.

6. Designing and Printing your Recording Materials:

Your company requires different materials such as invoices, receipts, vouchers and ledgers to record your transactions. There is a specific format of these materials to ensure that all the required information are captured and some are even to be approved from regulators prior to use. You need to design and print those materials to ensure that your first transaction is recorded correctly. If you are registered at VAT, you need to have sales and purchase register where you will enter all the VAT sales and VAT purchases. Also, these registers must be authorized by IRD.

[FOR COMPANIES REGISTERED AT VAT] Keep in mind that for a new accounting period (financial year), new sales and purchase registers must be maintained. These need to be authorized from IRD within 25th of Shrawan. (Financial Year in Nepal ends at Asar end and start from 1st of Shrawan).

Additional (These are not mandatory but recommended)

7. Designing a company logo and stationary:

This can be done right after the company registration or alongside the registration process. Designing your unique logo, business card, letterhead, envelope and brand identity guidelines and other stationeries. Branding is one of the most important aspects of the business so you need to think about it from the right start of your company.

8. Brand Protection (Trademark, Copyright, Patent):

You may wish to protect your company name or name and logo of your product. You can apply for trademark once you obtain PAN certificate. Also, if your business has any unique process/technology, you can also register a patent for that. Details of patient, trademark, copyright and other intellectual properties here:

9. Designing and implementing your Accounting System:

From the day you start your transaction, you must record your transactions in line with a minimum requirement of government authorities (Inland Revenue Department, Office of Company Registrar and other Industry Specific Regulators) and Nepal Accounting Standards. Value Added Tax (VAT) Income Tax, Excise Duty and any other tax are calculated based on data captured in your accounting system. If you will not be able to comply with the requirement of those authorities and submit sufficient evidence of the transactions you recorded, you may have to pay additional tax, fines and penalties. Only a robust accounting and internal control system will help you to scale your business in case of need.

The above-mentioned actions might seem tedious for the beginners. However, they are utmost necessary to a) keep your business insulated from future legal and regulatory hassles (b) create a robust internal control mechanism (c) sustain the business in long-term by being able to regularly review the financial position of the business. If you find the process too complicated, we advise you to take experts’ service rather than to ignore it.

10. Create a website, social media accounts:

In the digital age, it is absolutely essential for your business to have an online presence. Whether it’s a website, an e-commerce platform, a social media page or a combination of all three, getting your company online will reap major benefits. Even if your company does not conduct business online, customers and potential customers are expecting to see you online. A digital presence gives your brand an ideal platform to communicate with consumers. It gives you the opportunity to set the narrative on who you are as a brand and set yourself apart from your competitors. You can create a website, social media accounts, youtube channels at absolutely no cost if you can spare some time.  A company can apply for a free domain name (COMPANYNAME.com.np) at https://register.com.np/ and create a free website with blogspot.com. However, if you need a .COM or .ORG URL (domain name), you need to purchase it (~10$/year).

If you don’t have enough time or knowledge or wish to have a professional website, you can consult a web development agency. Generally, web developers charge somewhere between Rs 10,000-50,000 for a basic website.

Also, you every Private Limited Company have to submit the following documents yearly:

  1. Submit Audited Financial Statements (Audit Report) to Inland Revenue Department (Kar Karyalaya) before Ashoj End every year. The financial statements need to be signed by Registered Auditor or Chartered Accountant , Director of the company and Accountant who prepared the statements. You need to upload the statements and fill the records at IRD dashboard.
  2. Submit Audited Financial Statements (Audit Report) , Minutes of Annual General Meeting (AGM / बार्षिक साधारण सभा ) to Office of The Company Registrar (OCR) before Poush End every year.
  3. If you have any specific licenses/ affiliations/permits obtained from various authorities, you may be required to submit those documents to the authorities as well.

If you have any confusion/ queries or require any assistance , BizSewa is always there by your side.

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