Great News for Delinquent Companies: The Nepal government has introduced a penalty waiver scheme valid until Ashadh 2082 (July 2025). If you have failed to submit annual returns (Section 80/81), you can now close your company by paying only 10% of the accrued fines or 0.5% of your paid-up capital (whichever is lower).
If you miss this window, fines will revert to NPR 20,000 per year per section.
“Closing a company in Nepal is legally more complex than opening one. In 2025, the digital integration between the Office of the Company Registrar (OCR) and the Inland Revenue Department (IRD) means a single missing document can stall your exit for months. This guide is your audit-proof operational manual.”
Whether you are a startup that didn’t launch or a mature industry winding down, there are three distinct legal paths to closure in Nepal. Choosing the wrong one can lead to years of blacklisting and personal liability for directors.
1. Choose Your Exit Strategy
Under the Companies Act 2063, not all closures are the same. Identify which category you fall into immediately.
| Path | Ideal For… | Key Feature (2025) |
|---|---|---|
| 1. Special Deregistration (Section 136A) | Companies that are defunct, have no assets/liabilities, or never started operations. | Fast Track: Uses the 0.5% capital fee cap. No liquidator required. |
| 2. Voluntary Liquidation | Active companies with assets to sell and debts to pay. | The Standard: Requires a Liquidator and “Declaration of Solvency.” |
| 3. Insolvency (Bankruptcy) | Companies that cannot pay their debts. | Court Driven: Managed by High Court under Insolvency Act 2063. |
2. The “Special” Deregistration (Darta Khareji)
This is the most common route for SMEs and startups. If you haven’t traded for years, do not go for liquidation. Go for Darta Khareji.
- Companies that have not commenced business.
- Companies that failed to file returns for 3 consecutive years.
- Companies with Zero Assets & Zero Liabilities.
Applications are now submitted via the OCR CAMIS Online System. You must update all director KYC details digitally before the “Close Company” button even appears.
The Documentation Checklist (Darta Khareji)
General Meeting Resolution
A “Special Resolution” passed by 75% of shareholders agreeing to the closure and confirming no third-party dues exist.
Auditor’s Certification
A certificate from a Registered Auditor confirming the company has no assets or liabilities. This replaces the full audit report for dormant companies.
The 0.5% Fee Payment
Instead of calculating years of fines, you pay 0.5% of your Paid-Up Capital (plus the application fee) to the OCR revenue account.
3. Voluntary Liquidation (For Active Companies)
If you have money in the bank, cars, stocks, or creditors, you must liquidate. This process takes 6 to 12 months.
The “Solvency Declaration” Trap
Directors must sign an affidavit stating the company can pay all debts within 1 year. If this turns out to be false, directors face criminal charges under the Companies Act.
Phase 1: Appointment
You must appoint a Liquidator (usually a Chartered Accountant or Lawyer). Once appointed, the Board of Directors loses all power. The Liquidator becomes the CEO.
Phase 2: The Public Notice
A notice must be published in a national daily newspaper (e.g., Gorkhapatra) giving creditors 35 days to claim dues. The cutout of this ad is a mandatory document for the OCR.
4. The Financial Bottleneck: IRD & Tax Clearance
The OCR will not close your file without a Tax Clearance Certificate (TCC) from the Inland Revenue Department. This is where 90% of closures get stuck.
| Requirement | The Challenge | Solution |
|---|---|---|
| Closure Audit | Auditors often copy-paste previous years. IRD rejects this. | Ensure the Balance Sheet explicitly shows “Zero Assets/Liabilities” at the end date. |
| VAT Deregistration | If turnover > 5M, IRD mandates a “Full Audit” which can take months. | Apply for VAT deregistration before applying for company closure. |
| Retained Earnings | If you have profit reserves, you cannot just close. | You must declare dividends, pay the 15% Dividend Tax, and then clear the account. |
5. Special Rules for Foreign Investors (FDI)
Closing a company with Foreign Direct Investment (FDI) involves two additional gatekeepers: the Department of Industry (DOI) and Nepal Rastra Bank (NRB).
Before OCR, you must cancel your industry registration at the DOI. They will verify that you have met any “Technology Transfer” obligations.
To send the liquidation proceeds back to your home country, you need NRB approval. You must prove the initial investment came through legitimate banking channels.
6. “Can I just walk away?” (The Risk of Ghosting)
Many business owners ask: “What if I just stop filing and let the company die?” In 2025, this is dangerous.
- ❌ Blacklisting: The Credit Information Bureau (CIB) will blacklist directors. You will not be able to get a personal loan, credit card, or register a new company.
- ❌ Travel Bans: In severe tax default cases, the IRD can request the Home Ministry to stop directors from leaving Nepal.
- ❌ Asset Freeze: Your personal bank accounts can be frozen to recover company tax dues (Section 104 of Income Tax Act).