Incorporating any company is associated with a legal entity, necessitating various formalities, <a href="https://corporatefinanceinstitute.com/resources/equities/shareholder/">Shareholders</a>, directors, and management must be alert about post-incorporation compliance to avoid penalties. The Companies Act 2063, with its norms and values, leaves no room for error. The provisions of the act, if minor delays or incomplete submissions can lead to heavy fines. The legal maxim, Ignorance of law is no excuse; also applies here, which stresses the importance of <a href="https://www.biznestbazaar.com/blog/compliance-checklist-for-private-business-operations-in-nepal">compliance</a> awareness. Directors, shareholders, and company officials need to be well-informed about the mandatory legal compliances post-incorporation. The companies after registration shall follow the provisions mentioned in their Articles of Association (AOA) and Memorandum of Association (MOA). Apart from MOA and AOA of the company, the company is required to comply with other provisions.&nbsp;You may also like: <a href="https://www.biznestbazaar.com/blog/compliance-checklist-for-private-business-operations-in-nepal">Compliance Checklist for Private Business Operations in Nepal</a>&nbsp;<h2>Steps after Incorporation</h2>&nbsp;<h3>Information of Permanent Address to OCR (स्थायी ठेगनाको जानकारी)</h3>&nbsp;Section 184, of The Companies Act, 2063 B.S., has a provision about the Office of the Company. The Company should inform the <a href="https://ocr.gov.np/">Office of Company Registrar </a>(OCR) about the address of its registered office within three months of its incorporation. The company shall place a signboard containing its name and address in Nepali outside its registered office. The company shall give information on its contact address such as telephone, fax, email, etc. to the OCR. The address information for OCR shall be submitted via the application.&nbsp;<h3>Formation of Board of Directors (BOD)(सञ्चालकहरुको नियुक्ती)</h3>&nbsp;Section 86 of The Companies Act 2063 B.S. outlines the <a href="https://www.wallstreetmojo.com/board-of-directors/">board of directors (BOD)</a> provisions and the number of directors in a company. According to the Act, the appointment and number of directors should be defined in the company's Articles of Association (AOA). Any company with more than one shareholder is required to form a BOD. The board must have a minimum of 2 and a maximum of 11 members, all of whom should be selected from among the shareholders.&nbsp;Initially, before the first Annual General Meeting (AGM) is held, the company's promoters are responsible for appointing the BOD from among themselves. The tenure of these appointed directors lasts until the first AGM. At the first AGM, either the previously appointed BOD is reauthorized, or a new BOD is elected. The tenure of the BOD after that is determined by the rules specified in the AOA.&nbsp;Companies with a single shareholder are not required to form a BOD. However, the company must still hold meetings, with every decision made by the sole shareholder. Essentially, the sole shareholder performs all the functions of the BOD.&nbsp;In practical terms, the BOD should be formed within three months of the company's operation and should inform OCR.&nbsp;Also read: <a href="https://www.biznestbazaar.com/blog/company-registration-process-in-nepal">Company Registration Process in Nepal</a>&nbsp;<h3>Appointment of Auditor(लेखा परिक्षको नियुक्ती)</h3>&nbsp;Section 111 of The Companies Act 2063 B.S. details the provisions regarding the appointment of auditors in a company. The appointment of an auditor is conducted through the general meeting, in accordance with the provisions outlined in the Memorandum of Association (MOA), Articles of Association (AOA), or a consensus agreement. Once an auditor is appointed, the company must inform the Office of the Company Registrar (OCR) within 15 days of the appointment.&nbsp;Although the law does not specifically mandate the appointment of an auditor within three months of company registration, it is generally practiced that companies do so within this timeframe. Initially, the promoters or the first Board of Directors (BOD) are responsible for appointing the auditor. Subsequently, the responsibility of appointing the auditor falls to the Annual General Meeting (AGM).&nbsp;<h3>Disclosure by directors(सञ्चालकहरुले जानकारी गराउनुपर्ने)</h3>&nbsp;In section 92, of The Companies Act, 2063 it has the provision about disclosure by directors. Within seven days after assuming office of director, the director should disclose whether the director has direct involvement or has any personal interest in any kind of sale and purchase or other kind of contract related with the transactions of the company.&nbsp;If the director has interest in the appointment of managing director, company secretary, officer of the company. The director should also disclose if they are directors of other companies too. If they have dealing in the shares or debentures of the company or of its holding or subsidiary company. The disclosure should be made in written agreement; the copy of the written agreement between the company and the director or their relative.&nbsp;&nbsp;Within 7 days of disclosure of such information it should be informed to the OCR, which the OCR shall record it in a separate register maintained for its purpose shall record the same in a separate register. The director shall also disclose about having any personal interest linked directly or indirectly to any contract, lease, transaction or agreement entered with the concerned company.&nbsp;Also read: <a href="https://www.biznestbazaar.com/blog/legal-process-of-selling-a-private-business-in-nepal">Legal process of selling a private business in Nepal</a>&nbsp;<h3>Allotment of Shares(शेयरको विवरणको कार्यलयमा पठाउने)</h3>&nbsp;Section 31 of The Companies Act 2063 B.S. outlines the provisions regarding the return of shares to be filed with the office. For the allotment of shares, a company must file a return of allotments with the Office of the Company Registrar (OCR) within thirty days after the share allotment. This return must include the number of shares issued and allotted, the total amount of shares, the names and addresses of the allottees, and the amount paid or due and payable on each share.&nbsp;In practical terms, the allotment of shares should be completed within three months of the company's operation. This process involves holding a preliminary general meeting where the shares are allotted. After the shares are allotted, the company must inform the OCR of the details.&nbsp;<h2>Frequently Asked Questions (FAQ)</h2>&nbsp;What is the minimum capital for a private company?The minimum capital required for a private company is Rs 100/- (Financial Act, 2080/2081).&nbsp;Why is disclosure under Section 92 important?Disclosure is important to avoid any legal issues or disputes.&nbsp;How many shareholders can a private limited company in Nepal have?A private limited company in Nepal can have up to 101 members.&nbsp;Can a private company issue shares to the public?No, a private company cannot offer shares to the public.&nbsp;Can a single shareholder form a private company in Nepal?Yes, a single shareholder can form a private company in Nepal. In such cases, no Board of Directors (BOD) is required, and the sole shareholder will perform all BOD functions.&nbsp; What is a Shareholder Registration Book (शेयर लगत) and how can it be obtained?A shareholder registration book is obtained by submitting compliance documents within three months, showing the bank statements of deposits made by shareholders as per their share subscription. After OCR verifies these documents, the share registration book is issued.&nbsp;What is a Director's Ledger (संचालक लगत) and how can it be obtained?A Directors Ledger is prepared after the appointment of the Board of Directors (BOD). It includes details like names, addresses, citizenship numbers, and positions of directors. This document needs to be verified by the OCR, although verification is not mandatory. &nbsp;What is an Income Source Form (लगानीको श्रोत फाराम)?To obtain a shareholder registration book, shareholders must show the <a href="https://www.biznestbazaar.com/blog/a-comprehensive-guide-to-securing-startup-funding-in-nepal">source of funds</a> used to pay for their subscribed shares.&nbsp;Is it mandatory to pay the full amount of subscribed shares when signing the MOA/AOA?No, it depends on the company's needs. If the capital requirement is low, the company may request partial payment instead of the full amount. &nbsp;Is it necessary to submit Section 92 details for a single shareholder company?No, Section 92 is relevant only after forming a BOD, so it does not apply to a single-shareholder company.&nbsp;Who bears the cost of the registration process?The company bears the cost of the <a href="https://www.biznestbazaar.com/blog/company-registration-process-in-nepal">registration process</a>. &nbsp;&nbsp;

post registration of private company

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