Short answer
A private limited company (Pvt. Ltd.) in Nepal is a company registered under the Companies Act 2063 with 1 to 101 shareholders, whose shares cannot be offered to the public. It is a separate legal person, so shareholders' liability is limited to the capital they agreed to invest. It is the standard structure for startups, SMEs and most foreign-invested businesses.
| Law | Companies Act 2063 |
|---|---|
| Shareholders | Minimum 1, maximum 101 |
| Public share offer | Not allowed |
| Liability | Limited to each shareholder's share capital |
| Name ending | “Private Limited” / “Pvt. Ltd.” (प्राइभेट लिमिटेड) |
| Minimum capital | No general legal minimum; sector and FDI rules may set one |
| Registered with | Office of Company Registrar (OCR) |
What “private limited” means
Private means the company's shares are held privately: it cannot invite the public to buy shares or debentures, and its articles normally restrict share transfers. Limited means the shareholders' liability is limited — if the company fails, a shareholder loses at most the amount they agreed to pay for their shares, and creditors cannot pursue their personal assets (unless they gave personal guarantees).
In Nepali the term is written प्राइभेट लिमिटेड कम्पनी, and the abbreviation “Pvt. Ltd.” must appear at the end of the company's name.
Key features of a Pvt. Ltd. company
- Separate legal entity: the company owns assets, signs contracts, sues and is sued in its own name.
- Perpetual succession: it continues even if shareholders change or die.
- One to 101 shareholders: a single founder can incorporate on their own.
- Directors: run the company under the Articles of Association, which set how many directors there are; small companies often have one or two.
- Transferable but restricted shares: transfers follow the AOA and must be recorded with the OCR.
- Annual compliance: audit, AGM (or the alternative the AOA allows) and an annual return to the OCR — see our yearly compliance guide.
Authorised, issued and paid-up capital explained
| Term | Meaning | Why it matters |
|---|---|---|
| Authorised capital | The maximum share capital the company may issue, stated in the MOA | Determines the OCR registration fee — see the fee table |
| Issued capital | The part of authorised capital actually allotted to shareholders | Defines ownership percentages |
| Paid-up capital | The amount shareholders have actually paid for issued shares | Used for some licences, banks and OCR late-fine bands |
Example: authorised NPR 50 lakh, issued NPR 20 lakh, paid-up NPR 10 lakh. The company can issue up to NPR 30 lakh more without amending the MOA.
Pvt. Ltd. vs public company vs firm
| Feature | Private limited company | Public limited company | Sole proprietorship / partnership firm |
|---|---|---|---|
| Registered with | OCR | OCR | Commerce department or local government |
| Owners | 1–101 shareholders | At least 7 promoters; public shareholders | 1 proprietor / 2+ partners |
| Liability | Limited | Limited | Unlimited, personal |
| Minimum capital | No general minimum | NPR 1 crore paid-up | None |
| Raise money from public | No | Yes (with SEBON approval) | No |
| Compliance burden | Moderate | High | Low |
| Foreign investment | Common vehicle for FDI | Possible | Not available to foreigners |
For the firm route, see our guide to business registration in Nepal.
Advantages and disadvantages
Advantages: limited liability, credibility with customers, banks and investors, easy entry of new shareholders, eligibility for foreign investment, and a structure that survives changes in ownership. Some contracts and tenders are only open to companies.
Disadvantages: more formalities than a firm — a statutory audit every year, annual returns to the OCR, board and shareholder records — and corporate income tax at 25% on profits, with further tax when profits are distributed as dividends. For a very small single-owner business with low risk, a firm can be simpler.
Who should choose a private limited company?
- Founders who want to protect personal assets from business risks.
- Startups planning to bring in co-founders, employees with equity, or investors.
- Any business with foreign shareholders.
- Businesses bidding for contracts or working with corporate clients who expect a company.
- Family businesses planning for succession.
Ready to set one up? Our step-by-step registration guide walks through the CAMIS process, and our team can register the Pvt. Ltd. company for you.
Key takeaways
- A Pvt. Ltd. company has 1–101 shareholders, cannot offer shares to the public and gives limited liability.
- Authorised capital sets the OCR fee; paid-up capital is what has actually been paid in.
- It suits most startups, SMEs and foreign-invested businesses.
- The trade-off is more compliance: audit, annual return and corporate tax.
Frequently asked questions
What does Pvt. Ltd. mean in Nepali?
It stands for Private Limited — प्राइभेट लिमिटेड — a company whose shares are privately held and whose shareholders have limited liability.
Can one person own a private limited company in Nepal?
Yes. A private company can be formed with a single shareholder, who usually also acts as director under the company's articles.
What is the maximum number of shareholders?
101. A company that needs more shareholders, or wants to raise money from the public, must be a public limited company.
Can a private company become a public company later?
Yes. It can convert by meeting the public company requirements and paying the conversion fee to the OCR.
Name two public companies registered in Nepal.
Listed banks and hydropower companies are typical examples of public limited companies; you can identify them by “Limited” without “Private” in the name and by their listing on the Nepal Stock Exchange.
How is a Pvt. Ltd. company taxed?
At the corporate rate — 25% for most businesses — on taxable profit, with withholding tax on dividends. See our income tax guide for companies.
Sources and official references
Government fees and rules change with each Finance Act and OCR/IRD notice. We re-check the figures on this page regularly; confirm the latest amount with the office concerned or ask our team before you pay.