The company renewal process in Nepal is a mandatory legal requirement that every registered company must fulfill annually. Under the Companies Act, 2063 (2006), all companies registered with the Office of the Company Registrar (OCR) in Nepal must renew their registration every fiscal year. Failing to complete the company renewal in Nepal on time can result in penalties, suspension, or even deregistration of the company.
This article explains everything about the annual company renewal process in Nepal, required documents, fees, and penalties in a straightforward manner.
What Is Company Renewal in Nepal?
Company renewal in Nepal refers to the annual process by which a registered company updates and confirms its operational status with the Office of the Company Registrar (OCR). The renewal process ensures that the company’s records are updated, tax filings are current, and the company remains legally active under Nepali law.
The legal basis for company renewal in Nepal is found in the Companies Act, 2063 (2006), specifically under Section 79 to Section 83, which mandates that companies submit annual returns and keep their registration current. The Income Tax Act, 2058 (2002) and Value Added Tax Act, 2052 (1996) also require annual compliance from registered businesses.
Which Companies Must Complete the Company Renewal Process in Nepal?
All types of legally registered companies in Nepal must undergo the annual renewal process. These include:
- Private Limited Companies (Pvt. Ltd.)
- Public Limited Companies (Ltd.)
- Single Member Companies
- Non-Profit Companies
- Foreign Company Branches registered in Nepal
- Joint Venture Companies
Even dormant companies or companies with no business transactions during the fiscal year must complete the company registration renewal in Nepal to maintain their legal status.
Key Authorities Involved in Company Renewal in Nepal
| Authority | Role |
|---|---|
| Office of the Company Registrar (OCR) | Primary authority for company renewal and annual returns |
| Inland Revenue Department (IRD) | Issues tax clearance and PAN/VAT compliance |
| Nepal Rastra Bank (NRB) | Involved for financial institution renewals |
| Department of Industry (DoI) | For industry-specific renewal and licensing |
| Local Government (Municipality/VDC) | Business operation license renewal |
You can visit the official website of the Office of the Company Registrar Nepal and the Inland Revenue Department for online services and information.
What Are the Documents Required for Company Renewal in Nepal?
The company renewal process in Nepal requires a specific set of documents. All documents must be prepared accurately before submission to the OCR or relevant authority.
Documents Required for Annual Return Submission (OCR):
- Completed Annual Return Form (Form No. 20) as prescribed under the Companies Act, 2063
- Minutes of the Annual General Meeting (AGM)
- Audited Financial Statements for the relevant fiscal year
- Auditor’s Report signed by a licensed auditor
- Board of Directors’ Report
- Tax Clearance Certificate from the Inland Revenue Department (IRD)
- Updated list of shareholders and directors
- Certificate of previous registration (photocopy)
- PAN Registration Certificate (photocopy)
- VAT Registration Certificate (if applicable)
- Company’s Memorandum and Articles of Association (if amendments were made)
Documents Required for Business Renewal (Local Government):
- Application form for renewal of business operating license
- Previous fiscal year’s tax payment receipt
- Ward-level business license renewal form
- House owner’s consent letter or lease agreement for business premises
- Passport-size photographs of authorized personnel
What Is the Step-by-Step Company Renewal Process in Nepal?
The company renewal process in Nepal involves several stages. Companies must complete these steps within the prescribed time limit.
Step 1: Hold the Annual General Meeting (AGM)
- The company must hold an Annual General Meeting (AGM) within 6 months from the end of the fiscal year as required under Section 76 of the Companies Act, 2063.
- During the AGM, the board must present and approve the audited financial statements and auditor’s report.
Step 2: Prepare Audited Financial Statements
- The company must appoint a licensed auditor registered with the Institute of Chartered Accountants of Nepal (ICAN).
- The auditor must prepare and certify the financial statements for the completed fiscal year.
Step 3: Obtain Tax Clearance Certificate
- The company must file income tax returns with the Inland Revenue Department (IRD).
- After filing and paying all due taxes, the IRD issues a Tax Clearance Certificate.
- Companies can apply for tax clearance through the IRD online portal.
Step 4: Prepare Annual Return Form
- Fill out Form No. 20 as per the Companies Act, 2063.
- The form must include details of directors, shareholders, share capital, registered address, and financial summaries.
Step 5: Submit Documents to the Office of the Company Registrar
- Submit all required documents along with Form No. 20 to the OCR’s office or through the OCR online portal at www.ocr.gov.np.
- Pay the prescribed annual renewal fee based on the company’s paid-up capital.
Step 6: Renew the Business Operating License
- Separately renew the business operating license at the concerned municipality or metropolitan city office.
- Submit the required documents and pay the renewal fee to the local government authority.
Step 7: Renew VAT and Other Licenses (If Applicable)
- If the company is VAT-registered, ensure that VAT returns are filed up to date with the IRD.
- Renew any sector-specific licenses with the relevant department (e.g., Department of Industry, Nepal Rastra Bank).
What Are the Fees for Company Renewal in Nepal?
The company renewal fee in Nepal varies based on the paid-up capital of the company. The OCR has set a fee structure as follows:
| Paid-Up Capital (NPR) | Annual Renewal Fee (NPR) |
|---|---|
| Up to 1,00,000 | 1,000 |
| 1,00,001 to 5,00,000 | 2,500 |
| 5,00,001 to 25,00,000 | 5,000 |
| 25,00,001 to 1,00,00,000 | 10,000 |
| 1,00,00,001 to 5,00,00,000 | 20,000 |
| Above 5,00,00,000 | 30,000 |
These fees are subject to change as per the government’s notification. Companies must also pay separate fees to the local government for business license renewal.
What Is the Deadline for Company Renewal in Nepal?
The deadline for annual return submission to the OCR is within 6 months after the end of the fiscal year. In Nepal, the fiscal year ends on Ashadh 32 (mid-July). Therefore, companies must complete the company renewal process in Nepal by Poush end (late December) of the same calendar year.
For tax clearance, the deadline follows the income tax return filing deadline set by the IRD, which is generally 3 months after the end of the fiscal year for companies, with a possible extension.
What Are the Penalties for Not Renewing a Company in Nepal?
The Companies Act, 2063 and related regulations impose penalties on companies that fail to complete the company renewal process in Nepal on time.
- Late fee: Companies that submit the annual return after the deadline must pay a late renewal fine as prescribed by OCR. The fine is usually NPR 100 per day for each day of delay, or a lump sum fine depending on the duration.
- Suspension of company registration: If a company fails to renew for a prolonged period, the OCR may suspend or blacklist the company’s registration.
- Deregistration: Under Section 146 of the Companies Act, 2063, the OCR has the authority to remove a company from the register if it fails to comply with the annual return requirements persistently.
- Directors’ personal liability: Directors of a non-compliant company may face personal fines and legal proceedings under the Companies Act, 2063.
- Tax penalties: Non-compliance with the IRD’s tax return deadlines attracts additional interest and penalties under the Income Tax Act, 2058.
Can a Company Renew Online in Nepal?
Yes. The Office of the Company Registrar has introduced an online company renewal system in Nepal. Companies can submit their annual returns and pay renewal fees through the OCR’s online portal at www.ocr.gov.np. The online system allows companies to:
- Submit Form No. 20 digitally
- Upload scanned copies of required documents
- Pay renewal fees through online banking
- Track the status of their renewal application
However, physical submission may still be required in certain cases or for specific document verifications.
What Happens After the Company Renewal Is Approved?
After the OCR reviews and approves the annual return submission, the company receives a renewal acknowledgment or updated registration certificate. The company’s status on the OCR database is updated to active and compliant. This status is necessary for:
- Opening or maintaining bank accounts
- Participating in government tenders
- Obtaining loans and financial services
- Signing contracts with other companies
- Applying for foreign investment approvals
FAQs
1. What is the deadline for company renewal in Nepal?
Companies must submit their annual return to the OCR within 6 months after the fiscal year ends (mid-July). The general deadline falls around late December of the same calendar year. Late submission attracts daily fines under the Companies Act, 2063.
2. Is tax clearance mandatory for company renewal in Nepal?
Yes. A Tax Clearance Certificate from the Inland Revenue Department (IRD) is a mandatory document for completing the company renewal process in Nepal. Companies must file all pending tax returns before applying for tax clearance.
3. Can a company renew online in Nepal?
Yes. The Office of the Company Registrar provides an online portal at www.ocr.gov.np where companies can submit annual returns, upload documents, and pay renewal fees digitally without visiting the office physically.
4. What is the penalty for not renewing a company in Nepal?
The penalty for late renewal includes a fine of NPR 100 per day of delay. Prolonged non-renewal can lead to suspension or deregistration of the company under Section 146 of the Companies Act, 2063.
5. Does a dormant company need to renew in Nepal?
Yes. Even a dormant or inactive company must complete the annual renewal process in Nepal. Failure to do so can result in the company being struck off the OCR register, regardless of its operational status.
6. What laws govern the company renewal process in Nepal?
The Companies Act, 2063 (2006), the Income Tax Act, 2058 (2002), and the Value Added Tax Act, 2052 (1996) collectively govern the company renewal process in Nepal. The OCR and IRD are the primary regulatory bodies.