Appointment, Resignation and Change of Directors in Nepal

Board Composition

The number and composition of directors should be determined from:

• Companies Act;

• Articles of Association;

• applicable sector law.

Regulated companies can have additional director requirements.

Examples:

• banks;

• insurance companies;

• listed companies;

• other regulated public companies.

Initial Directors

Until the first AGM, directors are generally appointed by the founders according to the statutory incorporation framework.

The initial directors should be correctly recorded in:

• incorporation documents;

• CAMIS;

• director register.

Appointment by General Meeting

Section 87 provides for general-meeting appointment after the initial period, subject to section 89 eligibility and the Articles.

The meeting resolution should identify:

• name;

• appointment date;

• term;

• capacity;

• remuneration where applicable;

• any special office.

Public Company Director Term

For a public company, the Articles may set the term, but the statutory maximum ordinary term is: 4 years.

A director may generally be reappointed after expiry of the term unless law or the Articles provide otherwise.

For a private company, director tenure is generally governed by its Articles and the Companies Act.

Casual Vacancy

Section 87 allows the board to fill a vacancy left by a director appointed through the AGM. Section 90(2) must also be read: its proviso concerning section 87(1) initial/casual appointments states service until the AGM, and its replacement provision addresses the remaining term of the vacated office.

Record the basis and effective period of the board appointment and arrange the required AGM treatment. Check the articles and any sector rules before representing the replacement as appointed unconditionally for the entire remainder.

Share Qualification

Current section 88 requires the share qualification stated in the articles. If the articles do not specify the number, its ordinary default is at least 100 shares.

The section expressly excepts directors appointed under section 86(3) and section 87(2), including the relevant independent and corporate-nominee categories. Determine the appointment category and any sector requirement before applying the default.

Director Disqualification

Check all applicable section 89 disqualifications before appointment, including age for public directors, insolvency, specified convictions, incapacity, payment/default issues and sector eligibility.

The current same-objective-company restriction contains exceptions for specified private-to-private, parent/subsidiary and public-to-public appointments. The public-company exception does not cover the specified banking, financial and insurance companies. These exceptions do not remove other conflicts or sector requirements.

Before determining that a person is disqualified, observe section 89(4)’s notice and reasonable opportunity to explain.

Director Register

Every company must maintain a separate register of:

• directors;

• company secretary, where applicable.

Section 107 requires information including:

• name;

• address;

• citizenship details;

• profession/business;

• appointment date;

• cessation/removal date.

Any change in this register must be reported to OCR within: 15 days.

Director Interest Disclosure

Within: 15 days after assuming office a director must provide the company with specified information concerning matters such as:

• interests in company transactions;

• related parties;

• other directorships;

• interests connected with management appointments;

• share/debenture dealings.

Section 92 requires the company to submit the information received from the director to OCR within: 7 days after receiving it.

This disclosure is distinct from simply recording the director in CAMIS.

Director's Share Interest

Section 94 requires disclosure of the director’s specified share/debenture interests in the company and the relevant parent/subsidiary group. For the events in subsection (2), written information is provided within 15 days after the director learns of the event, with the number, amount and class of the securities.

Keep the separate interest record required by the section. Do not treat the initial director-entry filing as completion of every later acquisition, disposal or option-related disclosure.

Resignation

Submit a written resignation and apply the company’s articles and the Act. Under section 89(3)(c), the director ceases to hold office when the board accepts the resignation. Record that acceptance and effective date rather than treating delivery of a private letter as the complete corporate process.

Update the director register and notify OCR within the section 107 period. Review bank mandates, delegated signing powers, regulator records and system access separately. Keep the resignation, decision and accepted filing outcome together.

Removal

Director removal should follow:

• statutory procedure;

• Articles;

• appropriate shareholder/board authority;

• notice/opportunity requirements where applicable.

A company should not simply delete a director from CAMIS without the underlying legal resolution.

CAMIS Filing

OCR has transferred post-registration corporate actions to CAMIS.

The filing package should be supported by the relevant:

• resolution;

• identification document;

• consent/appointment information;

• resignation/removal document;

• updated company records.

Director Change and Bank/Tax Records

After OCR records are updated, review whether changes are also required in:

• bank mandate;

• PAN/tax profile;

• VAT;

• SSF;

• industry/sector licence;

• digital signatures;

• company e-mail/accounts.

A person removed from the Board should not retain unnecessary financial/system authority.

Director Change Checklist

• Review AOA

• Check director eligibility

• Obtain consent

• Pass required resolution

• Record appointment/resignation/removal

• Update director register

• Collect interest disclosure

• File register change with OCR within 15 days

• File Section 92 disclosure where applicable

• Update CAMIS

• Update bank mandate

• Update regulator/tax records if required

• Preserve board/shareholder minutes

Common Errors

Appointing a director without checking disqualification

Removing director internally but leaving OCR/CAMIS unchanged

Missing the 15-day register-update reporting period

Ignoring director interest disclosures

Giving resigned director continued banking/system access

Further guidance and practical checks

Director changes affect governance, liability and authority. The corporate resolution, statutory register, CAMIS record and operational access rights should all be updated together.