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Posted on May 21, 2013 / Posted by admin (https://notes.tyrocity.com/author/admin/)

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Incorporation of joint stock company in Nepal

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Incorporation of joint stock company in Nepal

Following things are to be observed for incorporation of Joint Stock Company in Nepal:

1. File an application

It is the rst step. In any company registration, promoters have to le application in company registrar o ce. The application has to be signed
by at least 1 promoter in case of private company and at least 7 in case of public company. Along with application, following document should
be submitted,

Memorandum of association
Article of association
Copy of agreement (public company)
Copy of consensus agreement (private company)
License
Promoters certified copy of citizenship (Nepalese)
Permission letter obtained under law to make investment or run business in Nepal (foreigner)
Citizenship of concerned country
2. Submitting registration fee

Registration fee should be deposited in the Nepal Rastra Bank. Voucher is needed for the deposit of registration fee. It should be enclosed in
application form

3. Certi cate of incorporation:

After submitting the application form along with necessary document and registration fee, the o ce of the registration examines all these
documents submitted by the promoters and it will register company name within 15 days the receipt of the application. After registering the
o ce, the registrar issues the certi cate of incorporation to the company. Now a private company can run its business.

4. Certi cate of commencement of business

A report of proof about the full payment of shares by the promoters with signature by at least 1 director and 7 promoters must be lled. The
registrar examines all the documents. If it gets satis ed then it issues certi cate of commencement of business. Then only public company is
legally able to run business and it can issue prospectus also.

5. Allotment of shares

After receiving certi cate of commencement of business, public company can issue prospectus. It helps to attract investors for investing the
money in the company. Then they send application with application money. Generally application form is attached with prospectus. The time of
subscription must be kept open for at least 7 days. After receiving application shares are allotted. The BOD makes the allotment. There can be
full allotment or pro-rata allotment. Shares must be allotted within 3 months after application is called. There must be more than 50% o share
allotment. If allotment couldnt be made within 3 months then promoters must apply application for extending time with reasons. The time is
again extended for 3 months. If company couldnt allot the share for extended period then the company must return all the money with
interest.

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Related Notes:
1. Main documents for incorporation of joint stock company : memorandum, articles, prospectus (https://notes.tyrocity.com/main-
documents-for-incorporation-of-joint-stock-company-memorandum-articles-prospectus/)
2. Difference between private company and public company (https://notes.tyrocity.com/difference-between-private-company-and-public-
company/)
3. Types of company (https://notes.tyrocity.com/types-of-company/)
4. Characteristics of joint stock company (https://notes.tyrocity.com/characteristics-of-joint-stock-company/)
5. Registration of cooperative organization in Nepal (https://notes.tyrocity.com/registration-of-cooperative-organization-in-nepal/)
6. Joint Stock Company (https://notes.tyrocity.com/joint-stock-company/)

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