Company Registration in Nepal
A Company is a registered legal entity that aims to earn money through business. This legal Entity must get a legal permit to register in the Company Register Office of Nepal. You can define a Company in Nepal as an organization of allowed groups, individuals, or teams of people that unite in applying for an Independent Legal Organization. The Nepalese Corporate Legislation permits a registered Company in Nepal to produce, sell, service, and benefit from its services.
Company as a Legal Entity
![Company as a Legal Entity in Nepal Company as a Legal Entity in Nepal](https://www.registrationwala.com/storage/app/public/services/December2022/Company as a Legal Entity in Nepal (1).png)
The Nepalese Legislation recognizes a registered company as an independent legal individual. Like a person, the Company has the right to the following:
- Companies in Nepal can sue and be sued
- Companies in Nepal can secure their own property
- Companies in Nepal can hire employees
- Companies in Nepal can even make loans in their own Name
Both Nepalese citizens, as well as Foreign Nationals can register for a company in Nepal. But every corporate Entity, such as a Company, is bound by the legal criteria of the Nepal Administration.
Types of Company Models in Nepal
Nepal's Company Act of 2006 is the regulating law of Public, Private, and NPC companies for registering a company in Nepal. The OCR (Office of Company Registrar) is the competent authority for registering a business as a Company in Nepal. The OCR is located at Tripureshwor, Kathmandu. Further moving towards Company Registration, one must also understand that there are different kinds of Company Registration in Nepal. You must choose wisely which category you want your business to be registered in.
Private Companies
Limited Liability Companies or LLCs are Nepal's most common business model. Also, among them, a Private Limited Company is a commonly registered business model in the Himalayan country. One of the advantages of registering your business as an LLC is that the liability of its shareholder is limited to the extent of the amount made by the shareholder. A private company is a corporation whose shares are held by a few individuals, also known as shareholders, who agrees to register a company in a mutual agreement. The following corporal entities jointly own a Private Company:
![corporate entities jointly owing a private company corporate entities jointly owing a private company](https://www.registrationwala.com/storage/app/public/services/December2022/Corporate Entities jointly owning a Private Company_ (1).png)
- Company's Founders
- Company's Management
- Investors or Group of Investors
Public Companies
A Public Company is a corporation that issues shares of stock, bonds, securities, and debentures to the general public. These financial units are made available to the public, and are traded on the open market through a stock exchange. A public company is a company that sells all or a part of itself to the public via an IPO, i.e., Initial Public Offering. Each shareholder claims part of the Public Company's assets and profits.
Also, the Nepalese Government mandates the formation of a Public Limited Company for carrying out the following operations:
![Operations of a Public Limited Company Operations of a Public Limited Company](https://www.registrationwala.com/storage/app/public/services/December2022/Operations of a Public Limited Company_ (1).png)
- Banking and Financial Services
- Insurance
- Stock Exchange
- Pension Fund
- Mutual Fund
Private vs. Public Companies
![Private vs Public Companies Private vs Public Companies](https://www.registrationwala.com/storage/app/public/services/December2022/Private vs. Public Companies (1).png)
The difference between Public and Private Limited Companies in Nepal is the ability to raise public funds. Public companies can raise funds from the general public by issuing the following financial units:
- Securities
- Shares
- Bonds
- Debentures
However, Private Companies are restricted from collecting funds from the public. They can offer the shares only to a select group of shareholders. Also, a Public Company must maintain a minimum of 7 shareholders with no upper limit. However, a private company's maximum number of shareholders cannot be more than 101.
Non-Profit Company
![Non-Profit Company Non-Profit Company](https://www.registrationwala.com/storage/app/public/services/December2022/Non-Profit Company (1).png)
An NPC or a Non-Profit Company is not entitled to distribute any dividends or other capital from the profits earned to its shareholders or the company members to attain any objectives. The NPCs are incorporated to develop and promote professions to protect the collective rights and interests of the persons engaged in that profession. NPCs are registered for public utility, i.e., welfare objectives. But they must not engage in distributing the dividends. Examples of such companies are hospitals, trusts, campaigns, etc.