Who is a Company Secretary?
A Company Secretary in Nepal plays a pivotal role in ensuring corporate governance and compliance with various regulatory requirements. Under the Companies Act 2063 (2006), the position of Company Secretary has gained significant importance in Nepal’s corporate landscape. The role encompasses maintaining statutory records, ensuring regulatory compliance, and acting as a bridge between the company and various stakeholders.
The position has evolved from being merely an administrative role to becoming a key managerial position responsible for corporate governance. In Nepal’s growing business environment, Company Secretaries serve as compliance officers, corporate advisors, and guardians of corporate governance. They ensure that companies operate within the legal framework while maintaining transparency and accountability.
The importance of this role has been further emphasized by recent amendments to corporate laws and regulations, making it mandatory for certain categories of companies to appoint qualified Company Secretaries. This requirement reflects the government’s commitment to promoting professional management and good corporate governance practices in Nepali businesses.
II. Legal Requirements for Company Secretaries
The legal framework governing Company Secretaries in Nepal is primarily established by the Companies Act 2063 (2006) and various directives issued by the Office of Company Registrar (OCR). According to Section 164 of the Companies Act, public companies with paid-up capital exceeding NPR 30 million must appoint a qualified Company Secretary.
The legal requirements include:
- Minimum educational qualifications (Bachelor’s degree in relevant field)
- Professional certification from recognized institutions
- Clean criminal record
- Compliance with residency requirements
- Registration with relevant professional bodies
Additional regulations require Company Secretaries to maintain professional standards, undergo continuous professional development, and adhere to ethical guidelines set forth by regulatory bodies. The Securities Board of Nepal (SEBON) has also established specific requirements for Company Secretaries of listed companies.
III. Company Secretary Appointment Process
A. Step 1: Determining Eligibility and Qualifications
The first step involves verifying that candidates meet the minimum eligibility criteria set by law. This includes checking educational qualifications, professional certifications, and relevant experience. Candidates must possess at least a bachelor’s degree in law, management, or commerce, along with specific professional qualifications recognized by Nepali authorities.
B. Step 2: Appointment by Board of Directors
The Board of Directors must pass a resolution appointing the Company Secretary. This involves reviewing candidates’ credentials, conducting interviews, and ensuring compliance with internal company policies. The appointment must be documented in board meeting minutes and follow proper corporate governance procedures.
C. Step 3: Filing Necessary Documents with Authorities
After appointment, various documents must be filed with the Office of Company Registrar and other relevant authorities. This includes Form No. 9, appointment letter, educational certificates, and professional qualifications proof. The filing must be completed within prescribed timeframes to ensure compliance.
D. Step 4: Defining Roles and Responsibilities
The company must clearly define the Company Secretary’s roles and responsibilities through a formal appointment letter or contract. This should outline duties, reporting relationships, compensation, and performance expectations in accordance with legal requirements and company policies.
E. Step 5: Ongoing Compliance and Reporting
The appointed Company Secretary must maintain ongoing compliance with regulatory requirements, including regular reporting to authorities, maintaining statutory records, and ensuring timely filing of various returns and documents.
IV. Required Documents for Company Secretary Appointment
The essential documents required for Company Secretary appointment include:
- Board resolution for appointment
- Educational certificates and professional qualifications
- Identity proof and citizenship certificate
- Professional experience certificates
- No objection certificates from previous employers
- Declaration of compliance with legal requirements
- Form No. 9 for filing with OCR
- Appointment letter or service agreement
V. Our Company Secretary Services
Professional Company Secretary services typically include:
- Statutory compliance management
- Board meeting management and documentation
- Regulatory filings and returns
- Corporate governance advisory
- Shareholder communication
- Legal and regulatory compliance
- Record keeping and documentation
- Corporate restructuring support
- Due diligence assistance
VI. Typical Timeline for Appointment and Setup
The typical timeline for appointing a Company Secretary and establishing the role usually takes 4-6 weeks: Week 1: Initial assessment and candidate selection Week 2: Board approval and documentation Week 3: Filing with authorities Week 4: Role setup and handover Weeks 5-6: Training and system implementation
VII. Costs Associated with Company Secretary Services
The costs typically include:
- Professional fees (monthly/annual)
- Registration and filing fees
- Compliance management software
- Training and development costs
- Professional indemnity insurance
- Document management systems
- Ongoing certification costs
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VIII. Relevant Company Laws and Regulations
Key laws and regulations include:
- Companies Act 2063 (2006)
- Securities Act 2063 (2007)
- Nepal Chartered Accountants Act 2053
- Corporate Governance Guidelines
- Stock Exchange Regulations
- SEBON Directives
- Foreign Investment and Technology Transfer Act
IX. Current Company Secretary Practices in Nepal
Current practices in Nepal emphasize:
- Digital compliance management
- Enhanced corporate governance
- Stakeholder engagement
- Environmental, Social, and Governance (ESG) reporting
- Risk management
- Professional development
- Technology integration
- International best practices adoption
X. Conclusion
The role of Company Secretary in Nepal continues to evolve and gain importance in ensuring corporate governance and regulatory compliance. With increasing regulatory requirements and business complexity, professional Company Secretaries are essential for maintaining corporate integrity and facilitating sustainable business growth.
FAQs
- Who can be a company secretary in Nepal? A qualified professional with a bachelor’s degree in law, management, or commerce, along with relevant professional certifications and experience. They must be registered with appropriate professional bodies and meet regulatory requirements.
- Is a company secretary mandatory for all companies? No, only public companies with paid-up capital exceeding NPR 30 million must appoint a Company Secretary. However, other companies may voluntarily appoint one for better governance.
- What are the main duties of a company secretary? Key duties include ensuring regulatory compliance, maintaining statutory records, managing board meetings, filing returns, facilitating corporate communications, and advising on corporate governance matters.
- Can foreigners serve as company secretaries in Nepal? Foreigners can serve as Company Secretaries subject to work permit requirements and compliance with local regulations. However, they must meet all qualification and registration requirements.
- What qualifications are required for company secretaries? Required qualifications include a bachelor’s degree in relevant field, professional certification, practical experience, and registration with professional bodies. Continuous professional development is also mandatory.
- Can one person be secretary for multiple companies? Yes, a Company Secretary can serve multiple companies simultaneously, provided they can effectively fulfill their duties for each company and comply with regulatory requirements.
- What’s the liability of a company secretary? Company Secretaries can be held personally liable for non-compliance with statutory requirements, breach of duties, or negligence in performing their responsibilities under various laws and regulations.
