A public limited company is a type of company that can raise funds by issuing shares to the general public. It operates under certain legal requirements and is governed by the provisions of the Company Act 2063 of Nepal. Public limited companies usually have the following features:
1. Separate Legal Entity: The company is treated as a separate legal entity, independent of its shareholders.
2. Limited Liability: The liability of shareholders is limited to the amount they have invested in shares.
3. Minimum Members: At least seven shareholders are required to start a public limited company.
4. Maximum Members: There is no limit on the maximum number of shareholders.
5. Capital Raising: The company can raise funds by selling shares to the public and listing them on the stock exchange.
Steps to Incorporate a Public Limited Company in Nepal (As per Company Act 2063)
The incorporation of a public limited company in Nepal involves the following steps:
1. Name Reservation:
- Submit an application to the Office of the Company Registrar (OCR) for approval of the company name.
- Ensure the name is unique and complies with the naming guidelines.
2. Prepare Legal Documents:
The following documents must be prepared and submitted:
- Memorandum of Association (MOA): Outlines the company’s objectives and activities.
- Articles of Association (AOA): Contains rules and regulations for managing the company.
- Agreement Between Promoters: Specifies the roles and responsibilities of the promoters.
3. Application for Registration:
- Submit the application for registration to the OCR along with the prepared documents and prescribed fees.
- The application must include details about the company name, address, objectives, directors, and promoters.
4. Verification by OCR:
- The OCR reviews the application and verifies the documents.
- If all requirements are fulfilled, the OCR approves the application.
5. Issuance of Incorporation Certificate:
Once approved, the OCR issues a Certificate of Incorporation, which makes the company a legal entity.
6. Obtain PAN/VAT Registration:
Register the company with the Inland Revenue Department to obtain a Permanent Account Number (PAN) or VAT registration.
7. Publish a Public Notice:
Publish a public notice in a national newspaper about the incorporation of the company. This is to inform the public about the formation of the company.
8. Commencement of Business:
After incorporation, the company can start its business activities. If the company plans to raise capital from the public, it must issue a prospectus and get approval from the Securities Board of Nepal (SEBON).
A public limited company is suitable for large-scale businesses that require substantial capital. Its incorporation process under the Company Act 2063 ensures that the company complies with the legal requirements and operates transparently.
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