As per Article 2 (h) of Companies Act, 2063(2006), company not distributing profit is the company that is not entitled to distribute or pay to its members any dividends or any other moneys out of the profits earned or savings made for the attainment of any objectives. Instead, the profits earned by the company shall be used to increase the capital of the company or for the attainment of its objectives.

Goals and Objective of Company profit not distributing in Nepal

1. Registration of Company Not distributing profits
2. Registration of Non-Governmental Organization (NGOs)
3. International Non-Governmental Organization (INGOs)

Types of company not distributing profit

As per Article 2 (h) of Companies Act, 2063(2006), company not distributing profit is the company that is not entitled to distribute or pay to its members any dividends or any other moneys out of the profits earned or savings because its for public welfare rather than profit of its member.

4.1.Motive of Company not Distributing Profits:

1. Public welfare
2. Development of profession
3. Protection of collective rights and interest of person engaged in any profession
4. Public Utility/social cultural or scientific benevolent

4.2. Governing Law

• Companies Act 2007 (2063)
• Social Welfare Council Act, 1992 (2049)

4.3. Regulatory Authority/Body

• Office of Company Registrar (OCR)
• Social Welfare Council

4.4. Legal Criteria for Registration

1. The number of promoters promoting a company should be at least five;
2. After the incorporation of such company, it may have any number of its members, with a minimum of five members;
3. The membership of a company is not transferable in any manner;
4. The membership is terminated in the event of death, cancellation of registration or dissolution of such member or amalgamation of such member with another body or company.

4.5. Registration Process for Company Not Distributing Profit in Nepal

                                                            Registration Process of Company profit not distributing company

4.6 Documents Required for Registration at OCR

1. Application for registration
2. 2 x copies of Memorandum of Association (MOA)
3. 2 x copies of Articles of Association (MOA)
4. Notarized citizenship copies of all members including witness
5. Copy of certificate of registration, MOA, AOA and broad resolution of the promoter, if promoter is a company
6. Power of Attorney
7. Agreement between the members, if any

4.7 Documents Required for Registration at Ward Office

• Company Registration Certificate at OCR
• Office Rent Agreement
• A copy of Land Ownership Certificate
• A copy of citizenship of Landlord

4.8 Documents Required for Registration at Inland Revenue Office

• Application form
• Copy of registration document at OCR
• Copy of registration document at Ward Office

4.9 Documents Required for Registration at Social Welfare Council

• Application form
• Copy of registration document at OCR
• Copy of registration document at Ward Office
• Copy of registration document at inland Revenue Office

4.10 Time Duration of Completion of Registration Process

The registration process may take between 10 (ten) to 15 (fifteen) days.

4.11 Fees for Registration of Company Not Distributing Profit in Nepal

Prior approval of Office of Company Registrar (OCR) is required for expanding its branch.

1. Governing Law:

•   Association Registration Act 1977 (2034)
•    Social Welfare ACT 1992 (2049)

2. Regulatory body:

•    Chief Administration Office (DAO) or Office of Company Registrar (OCR)

3. Legal Criteria for Registration:

• Minimum of 7 Nepali Citizenship board member
• Executive Committee with at least 33% of female members

4. Process of Registration of NGO in Nepal:

Process of registration of NGO in Nepal
 

5. Required Documents:

Below required documents are listed for registration of NGO:

1. Minute to establish the NGO
2. Police report of all board members
3. Certified copies of Citizenship of board members
4. Photo pp size
5. Memorandum (MOA) and Article of Association (AOA)
6. Rent agreement

6. Time Required for registration:

It takes one to two months for overall process.

1. Governing Laws for registration of INGO

• Social Welfare Act 1992 and Regulation

2. Regulatory Body

•   Social Welfare Council

3. Agreements Required for INGO establishment in Nepal:

1. General Agreement

Basic Agreement between INGO and social welfare Council for its operation. Detail description of working sectors, projects and financial plan.

2. Project Agreement

Agreement between INGO Social Welfare Council and Local Partner for implementation of work projects prepared in details of budget planning, project methods and plans of operation with the help of local stakeholders.

3. Process for establishment of INGOs in Nepal as Follows:

Process of establishment of INGO in Nepal

 

 4. Legal and documents Requirement for Registration of INGOs:

1. Approval from Social Welfare Council
2. Project Agreement and General Agreement
3. Must Donate USD 2,00,000 per annual from outside Nepal
4. NGO and Profit Not Distributing company must be local partner to implement their project
5. Local Office for its operation with similar personality under foreign jurisdiction
6. Local office of INGO in Nepal must register with tax Office and must have Permanent Account Number (PAN)
7. Local Partner of INGO should get approval with Social Welfare Council for receiving fund.
8. Copy of Citizenship, passport with valid visa and other bio-data of head office Directors of INGO
9. Covering Letter
10. Reliable funding source’s evidence 

5. Time Period for Registration of INGOs in Nepal

Registration can be completed within 3 to 4 months

Please contact us today itself if you are in search of Corporate Lawyer in Nepal lawyer in Nepal on +9779841933745 or email [email protected]

Disclaimer: All contains available here are for general information purposes. A proper legal solution always depends on your particular circumstances thus seek advice from an attorney who can provide assurances of the information contained herein and interpretation of it.  All liability with respect to actions taken on the basis of the site’s information is hereby expressly disclaimed. 

DISCALIMER: Remember to check the latest information and requirements from the official sources, such as the Office of Company Registrar (OCR) of Nepal as procedures and requirements may change over time.

Updated on 06 Apr, 2024.