Company registration is a fairly easy and quick process if you have a good consultant. Many business consultancies that provide company registration services create a company for you and hand over all the documents and vouchers. Now it is the responsibility of business owners to carry out post-registration services. However, most small businesses can’t/ don’t hire an accountant or lawyer in their initial phase, so things can get a little confusing. However, we at Bizsewa provide assistance with these post-registration services as well. This is even reflected in our tagline, “One-Stop Business Solution
All businesses registered at any authorities should compulsorily take Permanent Account Number (PAN) to start and continue their operations. With the company, OCR (Office of The Company Registrar) provides you with a letter containing a PAN number that is reserved for your company
Before visiting the Inland Revenue Department (IRD) a.k.a Kar Karyalaya, you need to make sure you have these documents/things with you:
These documents must be filed in a document file and submitted at the IRD office of your ward that is specified in the company registration documents. In Kathmandu, almost all wards have their own IRD offices however in other places, there is a single IRD office for the municipality or district.
It is also mandatory to display a copy of the PAN certificate and company registration certificate at your office for public view. We recommend creating a color photocopy and framing it just in the reception area.
Please note that a company with an annual transaction exceeding NPR 50 lakh and a service provider with an annual transaction exceeding NPR 20 lakh must also get registered under Value Added Tax (VAT). The PAN number remains the same. Also, there are various businesses/industries that require compulsory VAT registration irrespective of their transaction volume. Details here:
Certain businesses and industries require to obtain licenses or permissions from their respective departments or bodies which regulate those businesses. If your business requires additional license/permission or registration for operation, please obtain that as well.
For example, if you register a travel and tourism company, you must get a tour license from the Department of Tourism. Similarly, a construction company requires a license to bid in tenders, the liquor seller needs to get registered at excise, Online shop should register at the Small and Cottage Industry department and Banijya Bibhag, and so on.
After you obtain a PAN certificate, you must open a bank account immediately. We advise all businesses to conduct their transactions through their bank account, be it collecting share capital, paying suppliers, or salary to your staff. This will help you to track the finances, and keep transparency and financial discipline. The best practice is to limit the use of cash, except for petty expenses or where it is not possible.
Please carry these documents/ things while visiting the bank to open an account for your company:
Before opening a bank account, here are a few things that all business owners should know:
Within 15 days of registration of the company, you need to submit the details about the appointment of the auditor and his/her fees. The appointment is done by passing the resolution at the shareholder’s meeting.
You must send various details about your company to OCR after registration of the company within three months of the completion of registration. This includes
Shareholders promise to pay the company for the shares they buy from the shares issued by the company. Within the promised date, you need to obtain share certificates authorized by OCR. To obtain share certificates, you need to provide a bank statement of your company showing the deposit of a sum equal to the allotted shares. You can use this sum to operate the business. (FIXED DEPOSIT IS NOT REQUIRED). If any shareholder wishes to provide any other assets other than cash, you can have that as well. For example, if a Shareholder wishes to obtain a certificate by giving the land of equivalent shares, he/she should transfer the ownership of the land to the company and provide those documents as well. Be informed that OCR charges a fine if you don’t obtain the certificate in time.
Your company requires different materials such as invoices, receipts, vouchers, and ledgers to record your transactions. There is a specific format for these materials to ensure that all the required information is captured, and some are even to be approved by regulators prior to use. You need to design and print those materials to ensure that your first transaction is recorded correctly. If you are registered at VAT, you need to have sales and purchase register where you will enter all the VAT sales and VAT purchases. Also, these registers must be authorized by IRD.
[FOR COMPANIES REGISTERED AT VAT] Keep in mind that for a new accounting period (financial
year), new sales and purchase registers must be maintained.These need to be authorized from
IRD within the 25th of Shrawan. (Financial Year in Nepal ends at Asar end and start from 1st
of Shrawan).This provision has been dismissed in Budget Speech 2078/79. This means you
don’t need to manually verify sales and purchase books yearly.
Your company should also be registered at your ward office. Please make sure to carry all the documents as mentioned in point 1 while visiting the ward office. Some IRD offices (Tax offices) might ask you to register at the ward office before accepting applications for IRD registration. Also, some ward offices ask for proof of tax payment made by the landlord (tiro tireko rasid). Update: Many tax offices are starting to ask applicants to register at ward office prior to registration at IRD.
Additional (These are not mandatory but recommended)
This can be done right after the company registration or alongside the registration process. Designing your unique logo, business card, letterhead, envelope and brand identity guidelines, and other stationeries. Branding is one of the most important aspects of the business, so you need to think about it from the right start of your company.
You may wish to protect your company name or the name and logo of your product. You can apply for a trademark once you obtain a PAN certificate. Also, if your business has any unique process/technology, you can also register a patent for that. There are various types of intellectual properties that you can acquire/ protect. Details of patient, trademark, copyright, and other intellectual properties: Intellectual Properties.
From the day you start your transaction, you must record your transactions in line with a minimum requirement of government authorities (Inland Revenue Department, Office of Company Registrar, and other Industry Specific Regulators) and Nepal Accounting Standards. Value Added Tax (VAT) Income Tax, Excise Duty, and any other tax are calculated based on data captured in your accounting system. If you will not be able to comply with the requirement of those authorities and submit sufficient evidence of the transactions you recorded, you may have to pay additional tax, fines, and penalties. Only a robust accounting and internal control system will help you to scale your business in case of need.
The above-mentioned actions might seem tedious for beginners. However, they are almost necessary to
If you find the process too complicated, we advise you to take the experts’ service rather than ignore it.