Registering a business in Nepal can be quite confusing and a lengthy process. There are a number of options available for those who wish to start a business in Nepal. With the large number of entrepreneurs growing in the country, it is important to have complete knowledge of the process.
1. Sole Proprietorship/Private Firm
There are different types of business firms. One of those is sole proprietorship or private firms; it is a business which is owned by only one person. Private firms are unincorporated business, where only the owner has sole authority over the business. These types of firms are easy to create and run. Also, these firms are not expensive as compared to other types of firms. If you want to start this type of firm, you will not need to file a separate tax return. The owner can report all the profits and losses on their own personal return.The Merits and Demerits of this type of firm are:
S.N
|
Merits
|
Demerits
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1
|
Easy to start and Dissolve
|
Sole proprietorship has limited capital
|
2
|
Motivation to Work
|
Sole proprietor only uses his ideas and innovation capacity. So there is limited managerial ability
|
3
|
Quick Decision
| |
4
|
Independent Control
|
Sole proprietor must work more to earn more profit .higher profit generation is important. So, there is dull and monotonous wok
|
5
|
Business Secrets
| |
6
|
Personal Contact
|
Death of sole proprietor causes death of sole proprietorship
|
7
|
Flexibility
|
There is no specialization in decision taking. So there can be chances of taking wrong decisions
|
8
|
Economy
| |
9
|
Social Utility
|
There is low investment resulting in limited areas of operation
|
If the owner has someone else to support the business with finance, the business will no more be called a sole firm and it will automatically change into a partnership firm. Running a business as such is beneficial, if the owner runs a small business that does not require
large capital.
Registration of Private Firm
Obtain necessary approvals from the relevant ministries/departments/bodies for permit/license to conduct business before getting it registered. There are some procedures that need to be followed for the registration of a private business firm in Nepal. The sole proprietorship or a private firm, according to relevant provision of the Private Firm Registration Act, 2014, requires the owner to register the business institute in either in:
Department of Cottage & Small Industries
|
Department of Commerce
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Department of Industry
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(घरेलु तथा साना उद्योग बिभाग)
|
(वाणिज्य विभाग)
|
(उद्योग विभाग)
|
Ministry Of Industry
|
Ministry of Commerce
|
Ministry Of Industry
|
In case of Cottage and Small (Rural) Industry
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In case if related to Commerce
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In case for any other kind of Industries
|
The person who wishes to start a firm must register the firm by submitting an application along with the required documents to the related Department in the prescribed legal format provided by the department and the official fees.
2. Company (Private/Public Company)
Registering your company is what will finally give your startup a legal existence. Before registering it can be a sole proprietorship or a partnership but once you take the decision to register, your company takes a life of its own and can be closed only by legal intervention. Registering a Company is a long and tedious procedure though, which will be quite heavy on both your pocket and on your time, if you want to do it all yourself. But none the less becoming an owner of a registered company brings its own advantages and very less disadvantages to you.
Before registering a company you have to decide what kind of company is suitable for your business needs, and shall obtain necessary approvals from the relevant ministries/departments/bodies for permit/license to conduct business before getting it registered at:
Office of the Company Registrar
|
(कम्पनी रजिष्ट्रारको कार्यालय)
|
Ministry of Industry
|
In case of Registration of Company (Pvt.Ltd./Ltd/NGO(NPO)
|
There are many types of companies, the most popular of which are Private (pvt. ltd.), Public (ltd.) and Not-for Profit.
A private limited company is a business entity that is held by private owners. This type of entity limits the owner’s liability to their ownership stake, and restricts shareholders from publicly trading shares.
A public company is a company that has permission to issue registered securities to the general public through an initial public offering (IPO) and it is traded on at least one stock exchange market. A public company is not authorized to begin its business operations just upon the grant of the certificate of incorporation. In order to be eligible to run as a public company, it should obtain another document called a trading certificate.
3. Setting up Business in Nepal (Sum Up)
Step 1: Obtain approvals
Obtain necessary approvals from the relevant ministries/departments/bodies for permit/license to conduct business.
Some of the relevant departments are:
Step 2: Register a Firm / Company
Investors will need to register an appropriate form of firm / company in the Department of Cottage and Small Industries (DCSI) or, Department of Commerce (DOC) or, Department of Industry or Office of the Company Registrar.
Please refer to the following site for details on the registration process:
Step 3: Register with the tax office
Following Firm / Company registration, investors will need to obtain PAN and VAT, if applicable, registration numbers from the Inland Revenue department
Details for registration can be obtained from the following:
Step 4: Open a bank account
Foreign investors will need to open a foreign currency account at Nepal Rastra Bank, the central bank of Nepal, for morehttp://www.investmentboard.gov.np/
Domestic Investors can open Bank Accounts with any banks with in the country as per their preferences.
Wish you All Happy & Successful Business here at Nepal.
For More, stay tuned.
#Stay_Happy
#Stay_Safe
#Stay_Connected
~ CA Loken
(Practicing Chartered Accountant)
