Beneficial Ownership Records and Statutory Disclosure in Nepal

The AML Act defines a beneficial owner as the ultimate natural person who directly or indirectly owns, controls, directs or influences a customer, transaction, property, legal person or legal arrangement. The registered shareholder and beneficial owner may therefore differ.

Keep both identities clear. A corporate shareholder remains the registered holder; identifying the people behind it does not replace that legal entry or transfer its shares.

Section 47 concerns shares carrying full voting rights registered in a shareholder’s name. A company may request the capacity in which the shareholder obtained them, whether another person invested in them, and the identity and nature of rights of another beneficiary.

The shareholder must provide the requested information within 30 days. After receiving it, the company records the request date, receipt date and substance alongside the shareholder’s entry in the share register, and sends the information to OCR within seven days.

These periods belong to the information-request process. Record its request and receipt dates separately from the transfer or annual compliance calendar.

AML Act section 35क addresses formation, registration and licensing of the legal persons it covers. It requires beneficial-owner information where direct or indirect investment, including through another person, reaches 15% or more, individually, jointly or as a group, or where someone is the beneficial owner through another means. The authority cannot complete the covered registration, establishment or licence without the required information.

This is the AML statutory test. It does not establish a universal OCR form threshold or exclude information that a company may request under section 47.

Section 35क(7) also covers the relevant legal persons already existing when that section commenced. They had one year from its commencement to submit the information to the registering or licensing body. For an older company, establish the provision’s actual commencement and the company’s formation dates before assessing an omitted filing against that transition period.

Start with the registered holder, then document the ownership chain, voting arrangements and economic rights. Ask who supplied the investment, who directs decisions and who receives the benefit. Obtain the documents supporting the answer.

For example, Company X owns shares in Company Y and Person A owns Company X. Y records X as its shareholder and examines A’s position through X. A change in X’s ownership may require Y’s beneficial-owner file to be reviewed even though Y’s immediate shareholder remains X.

A useful working file contains:

• The shareholder entry, share class, quantity and relevant investment.

• An ownership chart, declarations and evidence identifying the ultimate natural persons.

• The basis of voting, control or economic rights, supported by agreements or corporate records.

• The effective dates of arrangements and changes.

• Any section 47 request, response, register entry and OCR submission evidence.

Use this working file to support the disclosure. Obtain the current prescribed OCR form to establish the fields required for the actual submission.

As a practical control, review the file during formation, transfers, allotments, inheritance, restructuring and changes in a corporate shareholder or nominee arrangement. Include it in the annual compliance review and investigate inconsistencies.

Use each review to establish whether a statutory disclosure or OCR filing is due. Record the legal filing deadline separately from the company’s review date, applying the relevant statute and operative OCR instructions to the event.

Section 35क(5) requires the covered legal person to keep the information regularly updated and retain it for five years after a person’s beneficial-owner status ends, making it available to government or reporting entities when requested and otherwise as prescribed.

Preserve earlier versions and supporting evidence. Replacing an ownership chart with a new one should not erase who previously held the interest or when it changed.

Section 35ग separately requires the covered legal person’s specified basic particulars, including its identity, registration, legal form and governing-body information, to be publicly available. Where it has a beneficial owner, it must also disclose that owner when becoming a customer of a reporting entity.

Basic corporate information and a beneficial-owner evidence file serve different purposes. Provide information through the applicable lawful route and keep access to supporting identification appropriate to that purpose.

Reconcile the ownership file with the share register, governing documents and actual rights. Resolve missing identification and inconsistent declarations. Apply section 47’s request and reporting periods where that process has been used.

Then obtain the current OCR direction and applicable declaration or submission form. Retain what was submitted, the supporting records and the accepted outcome. A completed ownership chart by itself does not establish that a required regulatory filing has been accepted.