Running a company in Nepal comes with certain responsibilities and obligations. As a business owner, you need to be aware of the yearly compliance required to ensure financial compliance and maintain a thriving business. In this comprehensive guide, we will walk you through the essential yearly compliance that every company in Nepal must adhere to. From auditing financial statements to renewing licenses and paying taxes, we will cover it all. Let’s dive in!
Yearly Compliance Checklist for Private Limited Companies Registered in Nepal
Auditing Financial Statements within Ashoj End
To maintain transparency and accuracy in your financial records, it is mandatory to audit your company’s financial statements within Ashoj End, which falls in mid-October to mid-November. This process involves a thorough examination of your financial records, including balance sheets, income statements, and cash flow statements. Auditing provides a comprehensive overview of your company’s financial health and ensures compliance with regulatory standards.
Submitting Audited Financial Reports and Filling D-03 Tax Form Online
After the completion of the audit, you are required to submit the audited financial reports and fill out the D-03 tax form online. The audited financial reports provide a detailed summary of your company’s financial performance, while the D-03 tax form allows you to report your taxable income and calculate the applicable taxes. Make sure to accurately fill out the form to avoid any penalties or legal complications.
Paying All Outstanding Taxes and Obtaining Tax Clearance Certificate
Meeting your tax obligations is crucial for maintaining the legal standing of your company. You must pay all outstanding taxes, including income tax, value-added tax (VAT), and any other applicable taxes within the specified deadlines. Failure to do so can result in fines and legal consequences. Once you have cleared all your tax liabilities, you can obtain a tax clearance certificate from the tax office. This certificate serves as proof of your tax compliance and may be required for various business transactions.
Conducting Annual General Meeting before Paush End
An Annual General Meeting (AGM) is a vital corporate event that provides an opportunity for shareholders, directors, and other stakeholders to come together and discuss the company’s performance, financial results, and future plans. In Nepal, it is mandatory to conduct the AGM before Paush End, which falls in mid-January. The AGM ensures transparency, accountability, and compliance with corporate governance standards.
Submitting Audit Reports and AGM to the Office of the Company Registrar (OCR)
Following the AGM, you are required to submit the audit reports and AGM minutes to the Office of the Company Registrar (OCR). The OCR acts as the regulatory authority for companies in Nepal and maintains the official records. Timely submission of these documents ensures compliance and avoids any legal complications. OCR provides a letter (adyawadik letter) that your company has submitted all the required documents after you submit the documents.
Renewing EXIM Code (if applicable)
If your company engages in import and export activities, you must obtain an Export-Import (EXIM) code. The EXIM code enables smooth customs clearance and facilitates international trade. It is essential to renew your EXIM code every year to ensure uninterrupted operations and compliance with trade regulations.
Renewing Other Licenses
Apart from the EXIM code, your company may hold various other licenses and permits depending on your business activities. These licenses could include trade licenses, industry-specific permits, or certifications. It is crucial to identify and renew all the necessary licenses within their respective renewal periods. Failing to renew licenses can lead to disruptions in business operations and may result in legal penalties.
Paying Rent TDS and Renewing Business at Ward Office
If your company operates from rented premises, you are required to deduct Tax Deducted at Source (TDS) from the rent amount and deposit it with the tax authorities. This ensures compliance with tax regulations related to rental income. Additionally, you need to renew your business registration at the ward office to maintain the legal standing of your company.
FAQs (Frequently Asked Questions)
1. When should I audit my company’s financial statements?
You need to audit your company’s financial statements within Ashoj End, which typically falls in mid-October to mid-November.
2. How do I submit the audited financial reports and fill the D-03 tax form?
You can submit the audited financial reports and fill the D-03 tax form online through the official website of the tax authority.
3. What happens if I fail to pay outstanding taxes on time?
Failure to pay outstanding taxes on time can lead to penalties, fines, and legal consequences. It is essential to fulfill your tax obligations promptly.
4. How often should I renew my EXIM code?
You need to renew your EXIM code annually to ensure uninterrupted import and export operations.
5. What are the consequences of not renewing licenses?
Failure to renew licenses can result in disruptions in business operations, legal penalties, and potential closure of your company.
6. What is the purpose of paying rent TDS?
Paying rent TDS ensures compliance with tax regulations related to rental income and maintains the legal standing of your company.
In Short
Adhering to yearly compliance is crucial for the long-term success and sustainability of your company in Nepal. From auditing financial statements to conducting AGMs, renewing licenses, and paying taxes, each compliance requirement plays a vital role in maintaining transparency, compliance, and good corporate governance. By staying informed and fulfilling your obligations, you can create a strong foundation for your business and ensure its growth in the ever-evolving business landscape of Nepal.
