A Company Secretary in Nepal is a key corporate official who plays a vital role in ensuring that a company operates in compliance with applicable laws, rules, and regulations. The position is not limited to administrative work; rather, it carries significant responsibilities in maintaining transparency, accountability, and good corporate governance within an organization. The primary duty of a company secretary is to ensure legal and regulatory compliance. This includes maintaining and updating statutory registers and records, as well as preparing and filing necessary documents with regulatory bodies such as the Office of the Company Registrar. By doing so, they help the company avoid penalties, legal disputes, and compliance risks.

Another important function of the company secretary is to act as a bridge between the board of directors and shareholders. They organize board meetings and general meetings, prepare agendas, circulate notices, and accurately record minutes. In addition, they provide guidance to the board on corporate governance matters, making sure that the board’s decisions align with the company’s articles of association and relevant laws. Beyond compliance, a company secretary also manages effective corporate communication and information flow. They handle correspondence, disseminate information to shareholders, and ensure that decisions and policies are clearly communicated.

Legal Requirements for Company Secretary in Nepal

The role of a Company Secretary in Nepal is guided mainly by the Companies Act, 2063 (2006) and directives issued by the Office of the Company Registrar (OCR). Under Section 164 of the Act, every public company with paid-up capital above NPR 30 million must appoint a qualified Company Secretary.

To be eligible, a person must meet certain legal and professional requirements, which include:

• Having at least a Bachelor’s degree in a relevant subject.
• Holding a professional certification from a recognized institution.
• Maintaining a clean criminal record.
• Fulfilling necessary residency requirements.
• Being registered with the appropriate professional body.

In addition, Company Secretaries are expected to maintain high professional standards. They must regularly update their knowledge and skills through continuous professional development (CPD) and follow the ethical codes laid down by regulatory authorities.

For companies listed in the stock market, the Securities Board of Nepal (SEBON) has set additional rules and qualifications that must be fulfilled before someone can serve as a Company Secretary.

Legal Provision on Appointment of Company Secretary in Nepal

The appointment of a Company Secretary in Nepal is governed by Section 185 of the Companies Act, 2063 (2006). This section clearly outlines the requirements, qualifications, and restrictions related to the post. The detailed provisions are as follows:

Sub-section (1): Mandatory Appointment

• Every public company with paid-up capital of NPR 10 million or more must appoint a Company Secretary.
• The appointee must be a Nepali citizen who fulfills the qualifications mentioned in Sub-section (2).

Sub-section (2): Eligibility and Qualifications

• A person may be appointed as a Company Secretary if they meet either of the following criteria:
  1. At least two years of work experience in the relevant field after obtaining a professional certificate of Company Secretary issued by an authorized domestic or foreign institution; or
  2. At least three years of work experience in company management or a related field after completing a bachelor’s degree in law, management, commerce, or economics.
• A proviso to this sub-section states that Company Secretaries already working at the time of commencement of the Act could continue in their post for up to three years, even if they did not meet the new requirements.

Sub-section (3): Restriction on Directors

• No director of the same company can be appointed as the Company Secretary of that company.
• This ensures independence and prevents conflicts of interest.

Sub-section (4): Restriction on Multiple Appointments

• A person cannot be appointed as a Company Secretary in more than one company at the same time.
• However, there is an exception: the Company Secretary of a principal (parent) company may also serve as the Company Secretary of its subsidiary company.

Sub-section (5): Vacancy or Inability

• If the post of Company Secretary is vacant, or the incumbent Company Secretary is unable to perform their duties, the Board of Directors may designate another qualified employee of the company to carry out the functions of a Company Secretary until a formal appointment is made.

Importance of Section 185

These sub-sections highlight that the law not only sets minimum qualifications but also provides safeguards to ensure that:

• Only competent and experienced individuals hold the position.
• The independence of the Company Secretary is maintained by barring directors from appointment.
• There is continuity in corporate governance even when the post is vacant.
• Conflicts of interest are avoided by restricting multiple appointments.

In essence, Section 185 of the Companies Act, 2063 recognizes the Company Secretary as a central figure in ensuring legal compliance, transparency, and good governance in public companies in Nepal.

Functions, Duties, and Powers of a Company Secretary in Nepal

The role of the Company Secretary in Nepal is not only administrative but also legal, compliance-related, and governance-focused. The law has given this position a strong foundation under Section 186 of the Companies Act, 2063 (2006), which specifically sets out their functions, duties, and powers. The details of this provision can be explained as follows:

1. General Duties (Section 186(1))

The first duty of a Company Secretary is to ensure that the decisions of the Board of Directors and General Meetings are implemented effectively. This includes:

• Carrying out or causing to be carried out decisions taken by the company’s governing bodies.
• Executing the directions issued by the Office of the Company Registrar (OCR) or any other competent regulatory authority.
• Submitting all returns, documents, and decisions that are legally required to be filed with government bodies within the prescribed time period.

2. Specific Functions (Section 186(2))

In addition to general duties, the law prescribes specific functions to be carried out by the Company Secretary. These include:

• Convening Meetings: Calling meetings of the Board of Directors and the General Meeting when required.
• Preparing Agendas: Drafting the agenda for meetings and distributing them in advance to directors and shareholders.
• Maintaining Records: Keeping accurate minutes and authenticating the records of board meetings and general meetings.
• Issuing Notices: Sending official notices of share allotment and calls on shares based on board decisions.
• Managing Registers: Properly maintaining and authenticating the shareholder and debenture-holder registers, ensuring accuracy and legality.
• Handling Share Transactions: Referring matters of pledges, mortgages, transfers, or transmissions of shares/debentures to the Board of Directors or Chief Executive and ensuring proper execution.
• Addressing Shareholder Concerns: Transmitting written claims, complaints, suggestions, or advice from shareholders or debenture-holders to the board or relevant authorities, and then providing written feedback to the concerned party.
• Performing Other Legal Functions: Carrying out any other roles specified under the Companies Act or other prevailing laws.

3. Restrictions on Authority (Section 186(3))

• A Company Secretary is expressly barred from using their office to obtain personal benefits from or through the company.
• Any act that would result in personal gain must be approved by the General Meeting before it can be executed.

4. Code of Conduct (Section 186(4))

• The Company Secretary must strictly observe the Code of Conduct as prescribed by law.
• This ensures professionalism, accountability, and ethical standards in discharging duties.

Significance of Section 186

Section 186 of the Companies Act, 2063 establishes the Company Secretary as a central figure in corporate governance. The provision ensures that:

• Decisions of the company’s governing bodies are implemented without delay.
• Meetings are properly organized and documented.
• Shareholders’ rights are respected through proper record-keeping and transparent communication.
• Legal compliance is maintained at all times, reducing the risk of penalties and disputes.
• The role is exercised with independence, ethical conduct, and professional responsibility.

Conclusion:

In conclusion, the role of a company secretary in Nepal is indispensable for ensuring corporate compliance, transparency, and good governance. Beyond administrative responsibilities, the company secretary serves as a key legal and governance advisor, bridging the board of directors and shareholders while ensuring adherence to statutory requirements. As per the  Sections 185 and 186 of the Companies Act, 2063, this position carries clearly defined duties, functions and restrictions that safeguard corporate integrity and accountability.

By maintaining proper records, organizing meetings and facilitating effective communication, the company secretary not only helps companies comply with the law but also strengthens their governance framework.

As Nepal’s corporate sector continues to grow, the presence of competent and ethical Company Secretary will remain central to achieving sustainable, legally compliant and transparent business operations.