Post-registration compliance and corporate governance in Nepal refer to the ongoing legal and ethical responsibilities that a company must fulfill after being officially registered. These include maintaining financial and legal records, adhering to labor and tax laws, renewing licenses, ensuring transparency in operations, and upholding the rights of shareholders. These duties are not optional they are part of a company’s responsibility to operate within Nepal’s legal framework and to maintain its credibility in the market.
After incorporation, a company must begin by maintaining accurate internal records. This involves preparing and updating statutory registers such as those of shareholders, directors, and board resolutions. These records form the backbone of company governance and must be available for inspection when required. Failure to maintain these records can lead to legal complications during audits or investigations.
Financial compliance is another major component. Every company must prepare annual financial statements and have them audited by a licensed auditor, as required by the Companies Act, 2006. This audit ensures financial transparency and helps prevent fraud. Audited reports must be submitted to the Office of the Company Registrar (OCR) within the stipulated time. It is also important to maintain a proper accounting system that reflects the company’s financial transactions accurately.
Annual General Meetings (AGMs) are compulsory for public companies and private companies with significant capital. These meetings provide a platform to discuss financial results, elect or reappoint directors, declare dividends, and inform shareholders about major company decisions. Companies must send notices to shareholders and keep minutes of the meeting to meet legal and governance standards.
Tax compliance goes beyond just obtaining PAN and VAT registration. Businesses are required to file returns on time and pay applicable income tax, VAT, TDS (Tax Deducted at Source), and excise duties. The Inland Revenue Department (IRD) monitors these filings closely. Non-compliance can result in heavy fines, interest charges, and even company blacklisting.
Labor compliance is also essential, especially for companies with employees. They must issue appointment letters, maintain attendance, register with the Social Security Fund (SSF), and regularly deposit contributions. Maternity, medical, accident, and retirement benefits are covered under SSF. Violations of labor law not only invite penalties but can also harm a company’s public image.
Many businesses in Nepal operate in regulated sectors. These companies must renew licenses and meet sector-specific regulatory standards. For instance, hydro companies must report to the Department of Electricity Development, media houses to the Ministry of Communication, and cooperatives to the Department of Cooperatives. Compliance with sectoral rules helps avoid regulatory disputes and license cancellations.
Companies with foreign investment must additionally comply with rules from the Department of Industry (DOI), Nepal Rastra Bank (NRB), and the Investment Board Nepal (IBN). These include reporting capital inflows, repatriation of dividends, and foreign exchange transactions. Any delays or misreporting can delay business operations and raise suspicion from government authorities.
Corporate governance involves more than just following the law. It is about creating a system of accountability, fairness, and transparency. Directors and officers have a fiduciary duty to act in the company’s best interest. They must avoid conflicts of interest and insider trading, and must ensure all major decisions are made with shareholder approval. A good governance culture also prevents misuse of company assets and builds a strong ethical foundation.
In recent years, Nepal has also emphasized Corporate Social Responsibility (CSR), especially for large public companies. Businesses are encouraged to contribute to community development, environmental sustainability, and social equity. This is not just good ethics, it builds goodwill and strengthens stakeholder relationships.
Environmental compliance is increasingly becoming relevant too. Certain businesses, such as factories and hydropower companies, must undergo Environmental Impact Assessments (EIAs) and adhere to eco-friendly practices as per Nepal’s environmental laws. Climate responsibility is becoming an important aspect of sustainable governance.
Digital transformation is also affecting compliance. Many procedures like tax filing, document submission to OCR, and labor registration are now done online. This demands companies to be more tech-savvy and to maintain proper digital records. As e-governance grows, paperless systems and online audits are likely to become standard.
Failure to comply with post-registration obligations can have serious consequences. These include monetary fines, late fees, business suspension, license revocation, disqualification of directors, and in extreme cases, deregistration of the company. A non-compliant company also finds it harder to get loans, foreign investment, or partnerships.
On the other hand, companies that maintain strong compliance and governance gain the trust of investors, banks, regulators, and customers. They become eligible for government incentives, easier loans, and international partnerships. In today’s competitive business environment, compliance is not a burden it is a foundation for long-term success.