Conversion of Private and Public Companies in Nepal

Private Company → Public Company

Section 13 provides that a private company can convert into a public company where the General Meeting passes a:

Special Resolution

and the company satisfies the statutory conditions necessary to be a public company.

A private company cannot convert merely by changing:

“Pvt. Ltd.”

to

“Ltd.”

in its name.

Public-company Conditions

Before conversion, check at least:

Shareholders

A public company ordinarily requires at least: 7 shareholders/founders subject to statutory exceptions.

Paid-up Capital

The Companies Act ordinarily requires public-company paid-up capital of at least: NPR 10,000,000 unless another law or Gazette requirement imposes a higher amount.

Sector Law

Specified activities under Section 12 must operate as public companies, including certain:

• banking;

• financial;

• insurance;

• securities;

• pension/mutual-fund;

• telecom;

• prescribed activities.

Special Resolution

Conversion between private and public company is expressly included among the corporate matters requiring a Special Resolution under Section 83.

The company's:

• Memorandum;

• Articles;

• name;

• governance provisions

must be revised to comply with the new company type.

OCR Conversion Certificate

Section 13(2) requires the prescribed application and copy of the conversion decision within 30 days after the private-to-public decision. If the legal conditions are met, section 13(3) requires OCR to record the conversion and issue the certificate within 60 days. The applicant’s deadline and the registrar’s certificate period are separate.

Public-company provisions apply after conversion. Preserve the resolution, amended constitutional documents and conversion certificate together.

Commencement of Business After Private → Public Conversion

Section 63(1) normally requires a public company to obtain approval before commencing business. Its current proviso expressly exempts an already operating private company that converts to public from obtaining fresh commencement approval.

Establish whether the converting private company was already operating. If it was not, review the ordinary commencement requirements rather than assuming the exemption applies. Sector licences, minimum capital and other conditions remain separate.

OCR/CAMIS Documents

OCR's current registration-information page lists documents such as:

• prescribed application;

• General Meeting decision;

• proposed amended MOA/AOA;

• additional founder identification where relevant;

• capital-related evidence for Public → Private conversion.

Current conversion conditions

The same OCR page also still lists certain older documents involving 25% share relationships with a public company for Private → Public conversion. However, the current Companies Act text shows Section 13(1)(b) and (c)—the earlier provisions connected with those conditions—as repealed.

The repealed 25% share-link conditions are not universal current statutory conversion requirements. Check any filing request against the current Act and the facts of the company.

At filing, use the current CAMIS workflow and comply with any document request that is operationally applicable to the specific case.

Assets and Liabilities Continue

After Private → Public conversion:

all property and liabilities of the private company pass to/continue in the converted public company.

The conversion therefore does not ordinarily require:

• selling all assets;

• terminating all liabilities;

• forming an entirely new legal entity.

However, contracts/licences may still require notices or regulator updates.

Public Company → Private Company

Section 14 contains mandatory conversion circumstances including where:

Shareholder Number

Public-company shareholders fall below: 7 or

Paid-up Capital

the company cannot maintain the statutory public-company paid-up capital required by Section 11, including following a lawful capital reduction, subject to the statutory exceptions.

Six-Month Requirement

Where the Section 14 conversion circumstance arises, the public company must amend its:

• Memorandum; and

• Articles

and convert into a private company within: 6 months.

Do not allow a company to continue indefinitely as a public company while failing the statutory shareholder/capital requirements.

Public → Private Documentation

OCR currently lists documents including:

• prescribed application;

• General Meeting decision;

• audit report showing capital;

• evidence where the shareholder count has fallen below seven;

• proposed amended MOA/AOA.

The actual CAMIS filing should be checked for the latest required fields/documents.

Regulated Companies

A company should not convert to private status where another law requires it to remain a public company.

Before conversion check:

• Nepal Rastra Bank;

• Nepal Insurance Authority;

• SEBON;

• telecom regulator;

• other sector law.

Companies operating activities required by Section 12 to be public require particular care.

Registration Fee

Calculate the conversion charge under the current OCR fee schedule and any relief applicable to the transaction. The amount depends on the relevant capital and registration category; retain the assessment and payment evidence.

After Conversion

Update:

• CAMIS/company certificate;

• MOA/AOA;

• company name;

• PAN/IRD;

• VAT;

• bank accounts/KYC;

• licences;

• contracts;

• invoices;

• letterhead;

• beneficial ownership;

• shareholder register;

• directors/governance;

• accounting system.

Example — Private to Public

Private company: 5 shareholders
Paid-up capital NPR 5,000,000

Desired: Public company.

Before conversion:

• increase shareholder structure to satisfy legal requirement;

• ensure paid-up capital reaches at least NPR 10,000,000;

• amend MOA/AOA;

• pass Special Resolution;

• file CAMIS/OCR conversion;

• obtain conversion certificate;

• satisfy commencement requirements.

Example — Public to Private

Public company: Shareholders fall from 8 to 5.

Section 14 is triggered.

The company should:

• determine the statutory conversion obligation;

• pass/record required corporate action;

• amend MOA/AOA;

• file OCR/CAMIS documents;

• complete conversion within the applicable 6-month period.

Conversion Checklist

• Identify reason for conversion

• Check Section 12/sector restriction

• Review shareholder number

• Review paid-up capital

• Review AOA/MOA

• Prepare Special Resolution

• Prepare amended MOA/AOA

• Obtain regulatory approval where needed

• File CAMIS conversion

• Pay OCR fee

• Obtain conversion certificate

• Obtain commencement approval where required

• Update PAN/VAT

• Update bank

• Update licences/contracts

• Update corporate stationery

• Update beneficial-owner/register records

Common Errors

Changing company name suffix without completing legal conversion

Converting Private → Public without meeting public-company capital/shareholder conditions

Applying the commencement rules without checking the operating-private-company conversion exemption

Treating outdated OCR 25% share-link documents as universal statutory requirements

Allowing Public company to remain below statutory shareholder/capital requirements

Ignoring sector-law restrictions

Further guidance and practical checks

Company conversion changes the governance regime applied to the same continuing legal enterprise. The statutory requirements, CAMIS record, capital structure and sector licences should be aligned before the company begins operating under the new status.