Company Update in Nepal (Company Compliance) is to fulfill the legal and regulatory requirements set by authorities like the Office of Company Registrar (OCR) and Inland Revenue Department (IRD). Companies must follow these processes annually to maintain good standing and avoid penalties. Compliance includes holding annual general meetings, submitting audited financial statements, updating company information, and filing tax returns.
This Article provides a complete guide for updating a Company in Nepal for the Office of Company Registrar. Prime Law Associates is a Legal Advisor to multiple companies in Nepal has 15 Years of Experience in updating/complying with the OCR. The Firm provides a top-notch Trademark Registration Service in Nepal. The Firm can be contacted through:
Process of Company Update (Compliance) in Nepal
Step 1: Submission of Company User & Password
Step 2: Annual General Meeting (AGM)
Step 3: Submission of Minutes of AGM
Steo 4: Shareholder & Director Update
Step 5: Audited Financial Statements
Step 6: Submission to IRD & OCR
Step 7: Completion of Company Compliance
Step 1: Submission of Company User & Password
The compliance process begins with submitting the company’s user ID and password to the Office of Company Registrar’s online portal. The Client must provide their Company User ID & Password to the Firm.
Step 2: Annual General Meeting (AGM)
Companies in Nepal must conduct an Annual General Meeting (AGM) within six months of the end of each fiscal year. The AGM serves as a platform for shareholders to review the company’s performance, approve financial statements, appoint auditors, and make key decisions. During the AGM, directors present the annual report, financial statements, and future plans to shareholders.
Step 3: Submission of Minutes of AGM
After the Annual General Meeting, companies must prepare and submit the minutes of the AGM to the Office of Company Registrar. These minutes should accurately record all discussions, decisions, and resolutions made during the meeting. The submission must include details such as the date, time, and location of the AGM, list of attendees, agenda items discussed, and voting results on resolutions.
Step 4: Shareholder & Director Update
Companies must update any changes in shareholder information or the composition of the board of directors. This includes reporting new shareholders, transfers of shares, appointments or resignations of directors, and changes in their personal details.
Step 5: Audited Financial Statements
Companies must engage a qualified auditor to review their financial records and prepare statements in accordance with Nepal’s accounting standards. The audited financial statements typically include the balance sheet, profit and loss account, and cash flow statement.
Step 6: Submission to IRD & OCR
Companies must submit their audited financial statements and tax returns to both the Inland Revenue Department (IRD) and the Office of Company Registrar (OCR). The IRD submission fulfills tax compliance requirements, while the OCR submission meets company law obligations.
Step 7: Completion of Company Compliance
The final step involves submitting all required documents and information have been submitted accurately and on time. This includes verifying that the AGM minutes, financial statements, tax returns, and any company updates have been properly filed with the relevant authorities. Companies should maintain records of all submissions and acknowledgments received from the OCR and IRD.
Company Compliance/Company Update Lawyer in Nepal (कम्पनी अध्यावधिक)
Prime Law Associates has a leading team of 10+ Lawyers providing legal, compliance & licensing services to growing startups & businesses in Nepal. The Firm with its experience is regularly engaged in advising & assisting for Company Update in Nepal
Amit Karna
Amit Karna is a Company Registration Lawyer in Nepal with extensive experience in registering multiple companies in Nepal.
Sukra Subba
Sukra Subba has 10 Years of experience in the Corporate Sector of Nepal & facilitating company registration at the Firm.
Documents & Information Required for Company Update in Nepal
To successfully complete the compliance process, companies in Nepal need to prepare and submit various documents and information:
- Annual Report: A comprehensive document detailing the company’s activities, financial performance, and future outlook.
- Audited Financial Statements: Including balance sheet, profit and loss account, and cash flow statement, prepared in accordance with Nepal Accounting Standards.
- Directors’ Report: A statement from the board of directors discussing the company’s performance, significant events, and future prospects.
- AGM Minutes: Detailed record of proceedings, resolutions, and decisions made during the Annual General Meeting.
- Shareholder Information: Updated list of shareholders, including any changes in shareholding patterns.
- Director Details: Current information on all directors, including appointments, resignations, and personal details.
- Tax Returns: Copies of income tax returns filed with the Inland Revenue Department.
- Company Registration Certificate: Copy of the original certificate issued by the Office of Company Registrar.
- Memorandum and Articles of Association: Any amendments made during the year must be reported.
Read More: Company Registration in Nepal । Company Registration Lawyer
Time Required for Company Update/Company Compliance in Nepal
The compliance process in Nepal follows a specific timeline:
- Fiscal Year End: Ashad 31 (mid-July)
- AGM Deadline: Within 6 months of fiscal year end (by mid-January)
- Submission of AGM Minutes: Within 30 days of AGM
- Financial Statement Submission: Within 6 months of fiscal year end
- Tax Return Filing: Within 3 months of fiscal year end (by mid-October)
- Annual Return Filing: Within 2 months of AGM
Types of Compliance
Annual Return
The annual return provides a snapshot of the company’s essential information, including registered office address, shareholders, directors, and share capital. It must be filed within two months of the AGM.
Audit Report
An independent auditor’s report on the company’s financial statements, verifying their accuracy and compliance with accounting standards. It forms a critical part of financial compliance.
Directors’ Report
This report outlines the company’s state of affairs, recommended dividend (if any), amount proposed for reserves, and other relevant information as required by the Companies Act.
Compliance Costs and Fees
Compliance costs in Nepal vary depending on company size and complexity. Typical expenses include:
- AGM expenses
- Audit fees
- Company secretary fees (if applicable)
- OCR filing fees
- Tax consultant fees
- Printing and documentation costs
Legal Framework for Company Compliance/Company Update in nepal
The primary legal foundations for company compliance in Nepal are:
- Companies Act, 2063 (2006)
- Income Tax Act, 2058 (2002)
Regulatory Authorities
Office of Company Registrar
The OCR oversees company registration, regulation, and compliance in Nepal. It maintains the company register, processes annual filings, and ensures adherence to the Companies Act.
Inland Revenue Department
The IRD is responsible for tax administration. It handles tax registrations, returns, and assessments, ensuring companies fulfill their tax obligations as part of the compliance process.
Conclusion
Company compliance in Nepal is a systematic process involving multiple steps and regulatory bodies. Prime Law Associates provides a leading Company Compliance /Update Services in Nepal.
Company Update/Company Compliance in Nepal: FAQs
What is the Company Update Process in Nepal?
The company update process involves submitting current information about shareholders, directors, and financial statements to the Office of Company Registrar annually, along with holding an AGM and filing tax returns.
What documents are required for Company Update?
Required documents include audited financial statements, AGM minutes, updated shareholder and director information, tax returns, and any amendments to company documents.
What happens if a company fails to file?
Failure to file can result in penalties, fines, and potential legal action. The company may also lose its good standing status and face operational restrictions.
What is the best Company Update Service in Nepal?
Prime Law Associates provides effective & regular Company Update Service in Nepal. The Firm has 15 Years of Experience in Company Law & Company Services in Nepal.
Can company update be done online in Nepal?
Yes, many aspects of company updates can be done online through the Office of Company Registrar’s portal, streamlining the process for businesses.
How often must companies hold annual general meetings?
Companies in Nepal must hold an Annual General Meeting (AGM) once every fiscal year, within six months of the fiscal year’s end.
What are the penalties for non-compliance?
Penalties for non-compliance can include fines, late fees, legal action, and in severe cases, potential deregistration of the company.
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