The concept paper argues that the existing Company Act, 2063 can no longer adequately address changes in technology, startup activity, investment practices and modern corporate administration. It links the proposed reform to constitutional guarantees on enterprise and investment, government economic and digital policies, international corporate-governance practices and the need to improve Nepal’s business environment and competitiveness.

Major proposals include online company registration, renewal and closure, digital authentication, electronic service delivery, disclosure of beneficial owners and registered owners, mandatory declarations in prescribed cases, and a risk-based compliance system. The concept paper also calls for clearer accountability of boards and directors, stronger provisions on public companies, mechanisms to address misconduct, simplified merger and acquisition procedures, and greater use of digital systems to reduce administrative costs and physical visits.

The proposed law would also introduce more flexible provisions for startups and employee ownership, including sweat equity, employee share schemes and shares beyond conventional fixed structures where appropriate. Other areas identified for reform include corporate social responsibility, community companies, minority-shareholder protection, company exit strategies, insolvency and liability, and clearer rules on dividend distribution, including where foreign shareholders are involved.

The government says the reforms are intended to make company administration more transparent, technology-driven, investment-friendly and compatible with international standards such as those associated with UNCITRAL, OECD, the World Bank and IMF. Rather than amending the existing law piecemeal, the concept paper recommends replacing it with an entirely new company law capable of addressing the structural changes of the past two decades.