INDUSTRIA DEL RECICLAJE

154. Registration of foreign company: (1) No foreign company shall carry on any business or transaction in the Nepal without having a branch office of such company registered with the office of such company registered with the office pursuant to this Section or establishes such office without having a liaison office registered.

Provided, however, that making investment in shares in any company established pursuant to law, lending moneys to such company or participating in the operation or management of such company, with the approval of the competent body, shall not be deemed to be the carrying on of a business or transaction for the purposes of this Chapter .

Explanation: Where any foreign company carries on any transaction for

a period of one month or more through an office established in Nepal or used therefor or appoints any person for regular contact or avails its

service, such company shall be deemed to have done a transaction or established an office in Nepal for the purpose of this Chapter.

(2) A foreign company desiring to have its branch office registered pursuant to Sub-section (1) shall make to the Office an application, accompanied by the permission obtained from the concerned body pursuant to the prevailing law, and the prescribed fees and in such format as prescribed, for the registration of such company.

(3) A foreign company desiring to have its liaison office registered pursuant to Sub-section (1) shall make to the Office an application, accompanied by the permission, if any, required to be obtained from the concerned body pursuant to the prevailing law for the registration of such office, and the prescribed fees and in such format as prescribed, for the registration of such company.

Explanation: where any foreign company is selected by any competent body pursuant to the prevailing law o r enters into contract with any competent body, for any business in Nepal, the making of such selection entering into such contract shall, for the purposes of Sub- sections (1) and (2) , be deemed to be the permission given by the concerned body.

(4) On receipt of an application made for the registration of a foreign company pursuant to Sub-section (2) or (3), the Office shall make necessary inquiry, register such company and give the registration certificate, as prescribed, no later than thirty days after the making of the application for carrying on a business or transaction in or establishing a liaison office in the Nepal.

(5) Where a foreign company cannot be registered pursuant to an application made under Sub-section (2) or (3), the Office shall give

information thereof, setting out the reasons for the same, to the concerned applicant within thirty days.

(6) A foreign company registered pursuant to Sub-section (4) may open its branch office and carry on the concerned business or transaction in or open its liaison office in the Nepal.

Provided, however, that a foreign company registered as a liaison office shall not be entitled to do any income earning activity in Nepal.

(7) Where the name of a foreign company making application pursuant to Sub-section (2) or (3) or the objective to be implemented by such company is of such a nature that it cannot be registered pursuant to this Act, such foreign company shall not be registered in Nepal.

(8) A foreign company registered pursuant to Sub-section (4) shall be deemed to have been registered to carry on only the same type of business or transaction as is being carried on by it in the country where its registered office is situated or it has been incorporated.

(9) A foreign company registered pursuant to this Section shall put its name board in the place of its business in a manner conspicuous to all,, and the name of country where the company has been established and the registration number of the company registered in Nepal shall be clearly mentioned in such board and bills, receipts , invoices, etc or letter head to be used by the company.

(10) The office shall maintain a separate register for the registration of foreign companies registered pursuant to this Section and make arrangements for the inspection of such register by the general public and for getting a copy thereof by paying the prescribed fees.

(11) Notwithstanding anything contained elsewhere in this Act, a foreign company registered pursuant to this Section shall not issue shares or debentures within the Nepal.

(12) Notwithstanding anything contained elsewhere in this Act , a foreign company which is carrying on a business or transaction or which has established its liaison office in the Nepal without having been registered at the time of commencement of this Act shall get it registered with the Office pursuant to this Act no later than six months after the date of commencement of this Act.

155. Submission of documents by foreign companies: (1) A foreign company which makes an application for its registration or for the establishment of its liaison office pursuant to Section 154 shall submit to the Office the following details, along with the application:

(a) Permission obtained by the foreign company from

the competent authority to carry on its business or transaction in Nepal;

(b) Copies of the charter, certificate of incorporation,

memorandum of association, articles of association of the company, and Nepalese translation thereof;

(c) Full name, address of the registered office and

principal place of business of the company, date of incorporation of the company, description of the paid up capital and major objectives of such company;

(d) Names, addresses of directors, manage, company

secretaries or main officers of the company and description of their citizenship;

(e) Name and address of the person residing or staying in the Nepal ,who is authorized by the company to receive, on its behalf, any summons, notice etc. issued in the name of the company;

(f) Full address of the principal place where the

company carries on its transaction or business in Nepal and of the office of the company situated in that place;

(g) Where the company is to carry on any transaction or

business in the State of Nepal, details of the proposed investment and transaction;

(h) Where the company is to commence its transaction in

Nepal, the proposed date thereof;

(i) A declaration made by a director of the company or

his/her representative, on behalf of the company, that the matters contained in the returns submitted by the company are true and correct;

(j) Power of attorney as referred to in Section 157.

(2) Where any amendment or alteration is made to or in the contents of any document submitted by any foreign company pursuant to Sub-section (1), a notice, accompanied by the details of such amendment or alteration, shall be given to the Office no later than thirty five days.

(3) While submitting any such documents issued outside Nepal or copies thereof as required to be submitted pursuant to Sub-section (1), they have to be certified pursuant to the law of the country of registration of the foreign company.

156. Books of account, audit and annual report of foreign company: (1) Every foreign company registered pursuant to Section 154 shall prepare an annual financial statement, along with the balance sheet and profit and loss account, in such a manner as to reflect the real situation of its transaction in Nepal, get it audited and submit the same to the Office no later than six months after the expiration of a financial year as if such company were a company incorporated under this Act.

(2) Every foreign company shall submit to the Office a copy of the annual financial statement, audit report and report of board of directors prepared for every financial year pursuant to the law of the country where its registered office is situated no later than three months after such statement and reports have been finally prepared.

(3) The annual financial statement to be prepared by a foreign company pursuant to Sub-section(1) shall include the following details:

(a) Statements prepared in a manner to show classifying

the particulars of the fixed, running and other properties held in the name of the foreign company within Nepal;

(b) clear details of cash held in the name of the foreign company with a bank and financial institution situated in Nepal;

(c) Clear details of cash held in the name of the foreign

company with a bank and financial institution situated in Nepal;

(d) Total amount of loans and liabilities, if any, due and

is a resident of Nepal or a Nepalese company registered under this Act.

(4) Where any report and statement required to be submitted to the Office pursuant to Sub-section (2), and any document required to be attached therewith, are in a language other than the Nepali or English language, a copy of authentic translation of such document into the Nepali or English language shall also be attached therewith.

(5) A foreign company which has got its liaison office registered in Nepal pursuant to Section 154 shall get certified by an auditor the statements of salary, allowance and amounts paid to the employees, consultants or liaison persons serving in such office, statements of deduction of tax from such payment pursuant to the prevailing law, payment of rental and expenses for the operation of such office and statements of deduction of tax from such payment pursuant to the prevailing law, and submit the same to the Office no later than three months after the expiration of a financial year.

157. Power of attorney: (1) A foreign company to be registered pursuant to Section 154 shall submit office copy of a power of attorney executed in the specified format in accordance with the legal requirements of the country where the company has been incorporated or its registered office is situated, hereby appointing a person residing in Nepal as its authorized representative for the purposes of the service of any summons or notice or authorizing such person to receive any other lawful notices on a lawsuit or legal action instituted on behalf or legal against the company .

(2) A power of attorney executed pursuant to Sub-section (1) shall

state, inter alias that where any summons or notice on a lawsuit

delivered to the authorized representative, it shall be binding on the company for any purpose whatsoever.

158. Cancellation of registration and liquidation of a foreign company: (1) Where a foreign company registered pursuant to Section 54 wishes to close down the transaction which it is carrying on in Nepal and get its registration canceled or where the competent authority, acting in accordance with the prevailing law, prohibits such company from carrying on the transaction or business within Nepal, such company shall make an application, accompanied by the prescribed fees, o the Office for the cancellation of its registration.

(2) A foreign company which makes an application pursuant to Sub-section (1) shall also submit, along with the application, an evidence and proof confirming that there is no liability due and payable by such company too any person, organization or governmental or non-governmental body in Nepal.

(3) In order to inquire whether the evidence and proof as referred to in Sub-section (2) are true or not, the Office shall publish at least twice in a national daily newspaper a notice inviting a claim, accompanied by evidence, on any liability, if any due and payable by the company to any one, within a period of twenty one days .

(4) Where any person makes a claim in pursuance of the notice published pursuant to Sub-section (3), the concerned company shall submit to the Office evidence or proof showing the settlement of such claim. Where the claim made against such company pursuant to Sub- section (1) cannot be settled from the assets of such company situated in Nepal , such company shall settle the same from its assets situated outside Nepal.

(5) Where no claim is made by any one within the time limit as referred to in Sub-section (3) or a proof is submitted showing than the claim made has been settled pursuant to Sub-section (4), the Office shall strike the name of such company off the foreign company register and give information thereof to the concerned company.

(6) Where an insolvency process is initiated in respect of a foreign company, which has been registered in Nepal pursuant to this Chapter, in accordance with the law of any country out of the countries where such company has been carrying on its transaction, the representative authorized by such foreign company pursuant to Section 157 shall promptly give a notice in writing thereof to the Office, and he/she shall also publish such notice in a national daily newspaper to be published from Nepal for the information of the general public.

Provided, however, that where an order for the cancellation of registration of such company has already been issued, such foreign company shall close its transaction or business in Nepal.

(7) Where any foreign company closes its transaction or business pursuant to the proviso to Sub-section (6) , the prevailing law on insolvency shall govern the transaction or business carried on by such company in the State of Nepal .

Chapter- 17

PROCEEDING OF LAWSUITS AND