This article outlines the legal framework, requirements, procedures and key considerations for successful cooperative registration in Nepal
Prime Law Associates is a leading Law Firm in Nepal that provides Cooperative Registration Services in Nepal. The Firm has previous experience of registering cooperatives. The Firm can be contacted through the following:
Requirements for Cooperative Registration
Minimum member requirements
To register a cooperative in Nepal, a minimum number of members is required:
- Primary cooperatives: At least 30 individual members
- Secondary cooperatives (unions): At least 5 primary cooperative members
- Tertiary cooperatives (federations): At least 5 secondary cooperative members
Share capital structure
Cooperatives must establish a share capital structure:
- Minimum share capital: NPR 100,000 for primary cooperatives
- Share value: Typically NPR 100 per share
- Maximum individual shareholding: Up to 20% of total share capital
Operational area definition
Cooperatives must define their operational area:
- Primary cooperatives: Usually limited to a specific geographical area (e.g., municipality, rural municipality)
- Secondary and tertiary cooperatives: Can have wider operational areas The operational area should be clearly stated in the cooperative’s bylaws and must align with the cooperative’s objectives and activities.
Also Read: Company Registration in Nepal: Company Registration Lawyer
Types of Cooperatives
Savings and credit cooperatives
Savings and credit cooperatives focus on providing financial services to members, including savings accounts, loans, and other financial products. They are regulated by both the Department of Cooperatives and the Nepal Rastra Bank.
Agricultural cooperatives
Agricultural cooperatives support farmers in various activities such as production, processing, marketing, and supply of agricultural inputs. They play a crucial role in rural development and food security in Nepal.
Multi-purpose cooperatives
Multi-purpose cooperatives engage in diverse activities to meet various needs of their members. They may combine elements of savings and credit, consumer goods supply, agricultural services, and other economic activities.
Cooperative Registration Service in Nepal
Prime Law Associates has assisted in the registration of multiple cooperatives in Nepal.
Amit Karna
Amit has experience in registering a cooperative in Nepal. He is involved in providing compliance & regulatory services to cooperatives.
Sukra Subba
Sukra Subba has 10 Years of experience in the Corporate Sector of Nepal & facilitates Cooperative Registration at the Firm.
Procedure for Cooperative Registration in Nepal
Step 1: Formation of Promoters’ Committee
Step 2: Preparation of Bylaws and Economic Feasibility Study
Step 3: Holding of Promoters’ Meeting
Step 4: Submission of Registration Application
Step 5: Verification and Issuance of Registration Certificate
Step 1: Formation of Promoters’ Committee
The first step in cooperative registration is forming a promoters’ committee. This committee, consisting of at least 30 individuals for primary cooperatives, initiates the registration process. They conduct initial meetings to discuss the cooperative’s objectives, prepare draft bylaws, and gather necessary documents. The committee also appoints a coordinator who will act as the primary contact person during the registration process.
Step 2: Preparation of Bylaws and Economic Feasibility Study
The promoters’ committee prepares the cooperative’s bylaws, which outline the organization’s structure, governance, and operational procedures. The bylaws must comply with the Cooperative Act and Rules. Simultaneously, an economic feasibility study is conducted to assess the viability of the proposed cooperative. This study analyzes the market potential, financial projections, and operational plans.
Step 3: Holding of Promoters’ Meeting
A formal promoters’ meeting is held to discuss and approve the draft bylaws and economic feasibility study. This meeting also elects an ad-hoc board of directors and decides on the share capital structure. Minutes of this meeting are prepared, documenting all decisions made. The meeting serves as a platform for potential members to voice their opinions and contribute to the cooperative’s formation.
Step 4: Submission of Registration Application
The cooperative submits a registration application to the relevant authority (local government office or Department of Cooperatives). The application package includes:
a. Completed registration form
b. Approved bylaws
c. Economic feasibility study
d. Minutes of promoters’ meeting
e. List of promoters with their details
f. Proof of share capital collection
g. Other supporting documents as required
The application is carefully reviewed to ensure all required information and documents are provided and comply with legal requirements.
Step 5: Verification and Issuance of Registration Certificate
The registering authority verifies the submitted documents and may conduct a field visit to assess the proposed cooperative’s premises and operational capacity. If all requirements are met, the authority issues a registration certificate. This certificate legally establishes the cooperative as a separate entity. After registration, the cooperative must hold its first general assembly within three months to elect a permanent board of directors and commence full operations. The cooperative is now officially recognized and can begin serving its members.
Documents Required for Cooperative Registration in Nepal
To register a cooperative in Nepal, the following documents are typically required:
- Application form for cooperative registration
- Proposed bylaws of the cooperative
- Minutes of the promoters’ meeting
- List of promoters with their full names, addresses, occupations, and signatures
- Citizenship certificates of all promoters (photocopies)
- Proof of share capital collection (bank deposit slip or similar document)
- Declaration of compliance with cooperative principles
- Details of proposed board members and their citizenship certificates
- Rental agreement or ownership document for the cooperative’s office premises
- Recommendation letter from the local government (if required)
- Tax clearance certificates of promoters (for certain types of cooperatives)
- Any additional documents specified by the registering authority
The registering authority may request additional documents or clarifications during the verification process.
Timeline for Cooperative Registration
The timeline for cooperative registration in Nepal can vary depending on various factors, but generally takes 2-3 months from start to finish. Cooperatives should plan accordingly and start the registration process well in advance of their intended operational start date.
Registration Costs and Fees
The costs associated with cooperative registration in Nepal include:
- Registration fee:
- Bylaws approval fee
- Economic feasibility study review fee
- Document verification and processing fees
Legal Framework for Cooperative Registration in Nepal
The primary legislation governing cooperatives in Nepal is the Cooperative Act 2074 (2017). This Act provides the legal basis for the formation, registration, and operation of cooperatives. It outlines the rights and responsibilities of cooperative members, governance structures, and regulatory oversight mechanisms. National Co-operative Policy, 2012 & Co-operative Rules, 2018.
Regulatory Authorities for Cooperative Registration in Nepal
The Department of Cooperatives under the Ministry of Land Management, Cooperatives and Poverty Alleviation is the primary regulatory authority for cooperatives in Nepal. It oversees the registration, regulation, and promotion of cooperatives at the national level. At the local level, cooperative registration and supervision are handled by the respective local government offices. The Nepal Rastra Bank regulates and supervises savings and credit cooperatives.
Cooperative Registration in Nepal: FAQs
How to register cooperative in Nepal?
To register a cooperative in Nepal, form a promoters’ committee, prepare bylaws and feasibility study, hold a promoters’ meeting, submit a registration application to the local government or Department of Cooperatives, and obtain a registration certificate after verification.
What are documents required for cooperative in Nepal?
Documents required for Cooperative Registration are registration application, bylaws, feasibility study, promoters’ meeting minutes, list of promoters, proof of share capital, citizenship certificates, office rental agreement, and any additional documents specified by the registering authority.
What laws & authorities govern cooperatives in Nepal?
Cooperatives in Nepal are governed by the Cooperative Act 2074 and Cooperative Rules 2075. The Department of Cooperatives, local government offices, and Nepal Rastra Bank (for savings and credit cooperatives) are the primary regulatory authorities.
What are the requirements for cooperative in Nepal?
Requirements include minimum member count, defined share capital structure, operational area specification, compliance with cooperative principles, and submission of necessary documents including bylaws and feasibility study.
What is the minimum number of members for cooperatives?
The minimum number of members for primary cooperatives in Nepal is 30 individuals. Secondary cooperatives (unions) require at least 5 primary cooperative members, while tertiary cooperatives (federations) need at least 5 secondary cooperative members.
Can foreigners join or form cooperatives in Nepal?
Generally, foreigners cannot form or join cooperatives in Nepal as citizenship is a requirement for membership. However, some exceptions may exist for Non-Resident Nepalis (NRNs) or in special cases approved by the government.
What is the time taken for cooperative in Nepal?
The cooperative registration process in Nepal typically takes 2-3 months from initial formation to receipt of the registration certificate. This timeline can vary based on the completeness of submitted documents and the workload of the registering authority.
Conclusion
Cooperative registration in Nepal offers a pathway for communities to establish member-owned organizations that drive economic and social development. The process requires careful planning, documentation, and compliance with cooperative principles.
Disclaimer: This Article is for informational purposes only and shall not be construed as legal advice, advertisement, personal communication, solicitation, or inducement of any sort from the firm or any of its members. The firm shall not be liable for consequences arising out of any action undertaken by any person relying on the information provided herein.
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