Share Capital, Shareholders and Share Transfers
Authorised, issued and paid-up capital do different jobs, and since March 2025 a Nepali company may issue shares for something other than cash.
Three kinds of capital
A Nepali company’s capital is described in three layers. Authorised capital is the ceiling in the memorandum. Issued capital is what has been allotted. Paid-up capital is what has actually been contributed. Nepali company documents conflate them constantly, and the conflation matters, because different rules attach to each.
The Office of the Company Registrar charges its registration fee on authorised capital, so headroom is paid for at incorporation whether or not it is used. Increasing capital later is charged at the new rate less the fee already paid, so nothing is lost by starting at the bottom of the band. The Companies Act 2063 (2006) imposes a paid-up minimum only on public companies, at NPR 10 million. Private companies have no statutory floor, though the Registrar’s published guidance and its fee schedule both begin at NPR 100,000 of authorised capital.
Late-filing fines, by contrast, are scaled to paid-up capital. A company that registers a large authorised capital but pays up very little sits in a low fine band and a high fee band at once.
Shares and debentures
The Act sets out the mechanics in full: the face value of a share, how applications and allotments work, when shares may be issued at a premium, and how classes carrying different rights are created. That last power is the statutory basis for preference structures. After allotment the company files a return of shares with the Office, which is what makes the state’s record of shareholding derivative of the company’s rather than the other way round.
The Act also mandates the paperwork behind the shareholding: share certificates, a register of shareholders and debenture-holders, rules on information as to title, an index of shareholders, and a record of substantial shareholders. Debentures have their own chapter, with a debenture trustee regime attached.
Two constraints override all of it for a private company. It may not sell shares or debentures publicly. And under section 10(d) it may not transfer title to securities to anyone other than an existing shareholder without following the procedure in the memorandum of consensus agreement.
Shares for non-cash consideration
Until 2025 the working assumption was that shares were paid for in money. That changed in two steps. An ordinance in January 2025 amended several statutes, and was replaced by the omnibus act authenticated on 31 March 2025, which amended six statutes at once, the Companies Act among them.
The reform allows a company to issue or sell shares, or grant rights over shares, for non-cash consideration. Practitioners cite intellectual property, services, goodwill, know-how and technical knowledge as the categories covered. Two safeguards attach. The value must be fixed by an independent valuation carried out by a certified professional, and the issue requires a special resolution of the general meeting. Grants may be made after incorporation, rather than only at formation.
Practitioners report caps of 20% of paid-up capital for shares granted to promoters on this basis, rising to 40% for start-up enterprises. A separate limb allows companies to offer shares to directors and employees in place of salary, allowances and benefits, under a written agreement, with the shares non-transferable during a holding period and the employee required to be in employment during the purchase period.
The same amendment made a governance change that matters to joint ventures. A representative of a parent company may now serve as a director of its subsidiary, and a person may hold directorships across several public companies with similar objectives. Banking, financial and insurance companies are excluded from that relaxation.
Read these provisions in the consolidated Nepali text before relying on them. Two practitioner accounts of the same amendment differ on which section was rewritten, and the caps are reported rather than quoted.
The three gates on a transfer
A share transfer in Nepal is no bilateral act between buyer and seller. It has to survive three separate checks, administered by three different parties.
The first gate is private ordering. The articles of association, and in a private company the consensus agreement, may restrict who may hold shares and on what terms. Section 10(d) makes the consensus agreement procedure a statutory precondition to transferring securities out of the existing shareholder body.
The second gate is the company’s own register. Section 44(1) is the operative provision. A company may refuse to record a pledge or to effect a transmission where a call on the share has not been paid, where the transmission would be contrary to the articles or the agreement concluded between the shareholders, or where the transfer fee has not been furnished. The company must inform both transferor and transferee within fifteen days of the application.
That second ground is more important than it looks. It gives a shareholders’ agreement direct effect at the point of registration. A transfer made in breach of it is more than a contractual wrong sounding in damages; it is a transfer the company is entitled to refuse to register. The Act deals separately with other circumstances in which shares may be transmitted, including by operation of law.
The third gate is the state, and it applies whenever a foreign party is on either side. A transfer of shares in a Nepali company to a foreign investor is itself foreign investment. It requires approval under the Foreign Investment and Technology Transfer Act 2075 (2019) from the Department of Industry or Investment Board Nepal, with the funds coming through the banking channel so that a later repatriation has a documented inbound leg to match. A foreign shareholder’s exit is a regulated event for the same reason.
For drafting, this means an option, a put or a drag-along exercisable by or against a foreign party is conditional on an approval the contract cannot deliver. Building a fixed timetable into an exit clause without addressing what happens if that approval is slow or refused is the commonest defect in Nepali joint venture documents.
The draft Companies Act
A draft replacement for the Companies Act went out for public consultation in 2026. Its capital proposals are substantial: minimum capital of NPR 50 million for unlisted public companies and NPR 250 million for listed ones, no uniform minimum for private companies, and foreign investment above NPR 500 million triggering mandatory public company status. A proposed 1% tax on share purchases above NPR 2.5 million drew market opposition and was reported to be under revision.
None of this is law. The Companies Act 2063 as amended to 31 March 2025 is the operative instrument, and a transaction planned on the draft’s numbers is planned on a document that may not survive consultation in the form it was published.
Sources
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Companies Act, 2063 (2006) — sections 27 to 50 [unofficial reproduction, actnepal.com]
Government of Nepal (English translation) · In force, as amended · Tier 6 — Professional or news source
Supports: Face value and application, allotment, premium issues, classes of share, the return of shares to the Office, share certificates, sale and pledge, transmission, the grounds for refusing to register a transfer and the 15-day notice, the shareholder register, and substantial shareholders.
Accessed 26 August 2026
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Government of Nepal (English translation) · In force, as amended · Tier 6 — Professional or news source
Supports: The bar on public sale of shares by a private company and the restriction on transferring securities to a non-shareholder without following the consensus agreement procedure.
Accessed 26 August 2026
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Companies Act, 2063 (2006), as amended to 2081.12.17 — consolidated Nepali text
Office of the Company Registrar · Consolidated as amended 31 March 2025 · Tier 1 — Primary legal instrument
Supports: That the operative text of the Companies Act incorporates amendments to 2081.12.17 (31 March 2025).
Accessed 26 August 2026
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Pradhan, Ghimire & Associates · 2025 · Tier 6 — Professional or news source
Supports: The 31 March 2025 authentication; the opening of share issues to non-cash consideration with independent valuation and special resolution; the reported 20% and 40% caps; employee share purchase plans; and the new exception permitting parent company representatives to sit on subsidiary boards.
Accessed 26 August 2026
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Imperial Law Associates · 2025 · Tier 6 — Professional or news source
Supports: That the reform was first introduced by ordinance on 13 January 2025, the categories of non-cash consideration, and the reported 20% and 40% caps.
Accessed 26 August 2026
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Everything Businesses Need to Know About Nepal's New Company Act Draft
Nepalnews · 2026 · Tier 6 — Professional or news source
Supports: The draft Companies Act proposals on minimum capital for unlisted and listed public companies, the foreign investment threshold triggering public status, and the proposed share transfer tax.
Accessed 26 August 2026
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