Two Deadlines, Both Fifteen Days, Both Misreported as Seven
A change of directors produces two separate duties, and the most widely circulated English translation of the Companies Act gets one of them wrong and omits half of the other.
| Duty | Who | To whom | Deadline |
|---|---|---|---|
| Record the change in the register of directors and notify the Office — s.107(2) | The company | OCR | 15 days |
| Disclose personal interests on taking office — s.92(1) | The incoming director | The company | 15 days |
| Forward that disclosure — s.92(3) | The company | OCR | 7 days of receipt |
Section 107(2), in the current Nepali text, ends:
“…and where any change occurs in those particulars, a notice of that shall also be sent to the Office within fifteen days.”
Both circulating English translations omit the words “to the Office” entirely, which turns a filing obligation into what reads like an internal record-keeping note. That is why so much guidance treats a director change as something you mention at the next annual return.
Section 92(1) was amended from seven days to fifteen by the First Amendment 2074. Every source quoting the English translation still says seven.
The most damaging advice in circulation tells companies to notify OCR of a director change “via the annual return”. That would have a company sit on a change for up to a year, in breach of a fifteen-day duty the whole time — and it would leave a resigned director on the public record as a director of a company they no longer control.
Appointing a Director
Section 87(1): directors are appointed by the general meeting, subject to Section 89 and to the articles. Section 77(6) makes appointment of directors and fixing their remuneration ordinary business of the annual general meeting. It is an ordinary resolution — appointment is not in the Section 83 list of special-resolution matters.
Two provisos matter in practice:
- Promoters appoint the directors until the first annual general meeting.
- A casual vacancy is filled by the board, not by a meeting.
And for a private company, Section 86(1) hands the whole question to your own document: the number of directors and the manner of their appointment are whatever the articles provide. Read your articles before assuming the Act’s default applies to you.
Removing a Director, and the Other Ways Office Ends
Section 89(3) lists how a person ceases to hold office:
| Route | What it takes |
|---|---|
| A disqualification under s.89(1) or (2) arises | Automatic, subject to s.89(4) |
| The general meeting resolves to remove them | Ordinary resolution — removal is not in the s.83 special-resolution list |
| Resignation | Effective when the board accepts it, not when it is tendered |
| Court finding, or blacklisting | Operates by law |
Before you treat anyone as disqualified, Section 89(4) requires you to tell them and give them a reasonable opportunity to defend themselves. Skipping that step is the usual reason a removal is later challenged. The Citizen Charter separately notes that where a director is being removed, the reason must be stated in the filing.
Note also that a resignation does not take effect on the day it is written. Until the board accepts it, the person remains a director — and remains exposed to the duties and the personal fines that come with the office.
Two disqualifications added in 2074 that catch ordinary companies
Section 89(1) lists the disqualifications. Two of them were inserted by the First Amendment 2074 and are absent from the English translation, and they are the two most likely to bite a normal small company:
s.89(1)(ta) — the three-year filing disqualification
A person is disqualified from being a director if they are a director of a company that has failed to file its returns with the Office for three consecutive financial years.
This is not a penalty on the dormant company — it is a disqualification attaching to the person, and it follows them to every other company they sit on. An abandoned Pvt. Ltd. from years ago can therefore disqualify its owner from the board of the business they actually run. See bringing a company up to date.
s.89(1)(ta-1) — unpaid fines
A person who still owes a fine imposed under Section 81(2) is disqualified. Section 81(2) fines fall on the director personally rather than on the company, so this is a disqualification a director can incur in their own name and then carry.
There Is No Form
No annex is prescribed for a director change. Published guidance offers “Form 20” and “Form No. 9”; neither cites any instrument, and neither corresponds to anything in the Gazette schedule.
The annex people are probably thinking of is अनुसूची २८, which is the oath a director takes under Section 99(3) before assuming office — a real document, but not a filing form for a change.
What OCR actually wants
- The board minute, or the general meeting decision where the appointment or removal was made there
- A consent letter from the incoming director
- The resignation letter from the outgoing director, and the board decision accepting it
- Citizenship or passport copy for the incoming director
- Where a director is removed, the reason
An AGM minute is not generally demanded, which is consistent with Section 107(2) being a notification rather than something the Office approves.
Fee, Penalty and Timeline
| Item | Position |
|---|---|
| Government fee | None in the Gazette schedule for a director change. NPR 1,000 applies only where an articles amendment rides along with capital unchanged. |
| Late fee | Section 81(6): NPR 200 per month from one month after the deadline, capped at NPR 1,000 per financial year. |
| Timeline | 3 days — Citizen Charter, for constituting or reconstituting the board and increasing or decreasing its number. |
The penalty ladder you will be quoted is the wrong one. Guidance offering “NPR 1,000–5,000, then 5,000–10,000, then up to 20,000 annually” for a late director filing is quoting the Section 81(2) annual-return ladder — which is banded by paid-up capital and applies to filings under Sections 51, 78, 80, 120, 131 and 156. A Section 107(2) notice is not in that group. It falls under Section 81(6), and the NPR 1,000 per financial year cap in its proviso appears in no secondary source we could find, nor on OCR’s own fee page.
If Your Paid-Up Capital Reaches NPR 1 Crore
Section 185(1) requires a company with paid-up capital of NPR 1,00,00,000 or more to appoint a company secretary. Directive §85(3) then requires the secretary’s details to be filed with OCR within 15 days of appointment — the same clock as a director change, and the register under Section 107 covers the secretary too.
Companies cross this threshold without noticing, usually when capitalising retained earnings. It is worth checking your paid-up figure whenever you restructure the board.
Two Things That Will Block the Filing
Arrears
OCR’s Citizen Charter repeats for every alteration service that a company behind on its filings must regularise them and pay the Section 81 fine as part of the alteration. A board reshuffle will not go through over an unfiled annual return — and if the arrears run to three consecutive years, s.89(1)(ta) may have disqualified the directors you are trying to appoint.
Unconsolidated documents — Directive §95(nya)
A company that has amended its memorandum or articles twice or more must consolidate them in OCR’s system, with a directors’ declaration, its official mobile number and its directors’ National ID numbers. Until that is done, sub-rule (8) allows the Office to refuse to record any other particulars — a director change included. The National ID requirement makes this one especially likely to surface exactly when you file a board change.
Frequently Asked
How many days do I have to notify OCR of a director change in Nepal?
Fifteen days. Section 107(2) of the Companies Act 2063 requires every company to keep a register of directors and the company secretary and, where any particular changes, to send notice of that to the Office within fifteen days. The words “to the Office” are missing from the circulating English translations, which is why a good deal of guidance wrongly treats the change as something to report in the annual return.
Is a special resolution needed to remove a director in Nepal?
No. Section 89(3)(b) provides that a director ceases to hold office where the general meeting passes a resolution to remove them, and removal does not appear in the Section 83 list of matters requiring a special resolution. An ordinary resolution suffices. Section 89(4) separately requires the company to inform the person and give them a reasonable opportunity to defend themselves before treating them as disqualified, and OCR requires the reason for removal to be stated in the filing.
Can I be disqualified as a director because of an old company in Nepal?
Yes. Section 89(1)(ta), added by the First Amendment 2074, disqualifies a person who is a director of a company that has failed to file its returns with the Office for three consecutive financial years. The disqualification attaches to the person, not to the dormant company, so a forgotten Pvt. Ltd. can disqualify its owner from the board of an active business. Section 89(1)(ta-1) likewise disqualifies anyone who still owes a fine imposed under Section 81(2).
When does a director resignation take effect in Nepal?
When the board accepts it. Section 89(3)(c) ties cessation of office to the board’s acceptance of the resignation, not to the date the resignation is tendered. Until then the person remains a director and remains exposed to the duties of the office and to the Section 81(2) fines that fall on directors personally rather than on the company.
What is the fee to change a director in Nepal?
There is no government fee in the Gazette schedule for a director change. NPR 1,000 becomes payable only where the filing also carries an amendment to the memorandum or articles with capital unchanged. Late filing falls under Section 81(6) at NPR 200 per month from one month after the deadline, subject to a proviso capping it at NPR 1,000 per financial year.
About this guide. Sections 77, 81, 83, 86, 87, 89, 92, 99, 107 and 185 are quoted from the Companies Act 2063 as consolidated to the 2081 amendment and published by the Office of the Company Registrar. We verified the fifteen-day figures in Sections 92(1) and 107(2) directly against that Nepali text, because the English translation in general circulation predates the First Amendment 2074 and states seven days for s.92(1) while omitting “to the Office” from s.107(2). Sections §85 and §95 are from the कम्पनी निर्देशिका 2072; timelines from OCR’s Citizen Charter; fees from the Nepal Gazette notification of 2064.02.14. The Directive is under public consultation for revision — confirm the position with OCR before relying on it.
Appointing or Removing a Director?
We prepare the decisions, the consent and resignation letters and the Section 107 notice inside the fifteen days — and check first whether any filing arrears have disqualified the people you are appointing.
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