chhatramani/Nepal-Legal-Text-Corpus-44laws huggingface dataset:
Companies Act 2063

Chapter 17 Proceeding Of Lawsuits And Punishments

Section 159 : Complaints and proceedings relating to cases under this Act
1) In respect of any matter under this Act, a case may be filed and proceedings taken only with a complaint made by the Office or the 162 director, officer, shareholder or member or creditor of a company or any other concerned person.
2) Except in cases where jurisdiction is expressly given to the Office on any matter under this Act, the Court shall have power to hear and settle the cases on offenses punishable under this Act, the mattes on which a complaint or application can be made to the Court as mentioned in various Sections of this Act and matters of compensation for amounts in controversy.
3) In hearing and settling cases under this Act, the Court shall follow the procedures as referred to in the Summary Procedures Act, 2028 (1971) .
4) An appeal against any decision or order made or issued by the Office of Court under Sub-section (2) may be made to the Court as specified by the Government of Nepal with the consent of the Supreme Court, within thirty-five days.
5) Notwithstanding anything contained in Sub-section(2), pending the specification of the Court by the Government of Nepal by a notification in the Nepal Gazette for hearing cases, suits and taking other actions pursuant to this Act, the Company Board formed pursuant to Section 1691 shall assume the jurisdiction of the concerned Court.
6) A complaint shall not be entertained if the complaint is not filed within two years from the date on which the cause of action in respect of any matter under this Act is known, except as provided for in the other provisions of this Act.
Companies Act 2063

Chapter 17 Proceeding Of Lawsuits And Punishments

Section 161 : Punishment with fine not exceeding fifty thousand rupees
The following person who commits the following offense shall be punished with a fine from ten thousand rupees to fifty thousand rupees:
(a) Where any shares are allotted in contravention of the provisions of this Act, the officer or person who makes such allotment;
(b) Where a company purchases, out of the company’s capital in stock, its own shares or the shares of its holding company contrary to this Act or makes investment in contravention this Act, every director of that company;
(c) In the event of failure to show or provide the books if account to the auditor as and when so required, the officer or person who has the duty to do so or provide the same;
(d) An auditor who does not present a report as specified in the Act;
(e) An director, manager and officer who does not make arrangements as referred to in Sub-section(3) of Section; 172;
(f) An director and officer who violates the provisions of Section 146 or 147 or who does not maintain such records books or returns as required to be maintained pursuant to this Act;
(g) An company, director, auditor, officer and employee who violate the provision contained in Chapter-18 or who fail to fulfil the duty and obligations specified in that Chapter;
(h) In the event of failure to call the general meeting or a meeting of the board of directors required to be called pursuant to this Act or failure to send a notice of the general meeting or a meeting of the board of directors or failure to prepare the documents to be made available to the shareholders before the holding or the general meeting or failure to present in the general meeting such documents as required to be presented, the director, officer or person who has the duty to maintain or do such act or to call the meeting or to send such notice;
(i) An officer who sets down any false deed or content of document stating that any matter which was neither done or happened to have been done or happened and vice versa in the minutes as referred to in Sub-section(1) of Section 75 and Sub-section (7) of Section 97 or such other return or report as required to be prepared an submitted to the company or Officer in such notice or information as required to be provided pursuant to this Act;
(j) In the event that an declaration made by the directors pursuant to Sub-section(2) of Section 136 is held to be false, the director who makes such false statement;
(k) An person who does false or wrong translation of any deed or document required to be submitted by a foreign company to the Office pursuant to this Act or any person who certifies the same.
Companies Act 2063

Chapter 17 Proceeding Of Lawsuits And Punishments

Section 162 : Punishment with fine not exceeding twenty thousand rupees
Except as provided in sections 160 and 161, the court shall impose a fine of five thousand to twenty thousand rupees on the concerned officer, director, managing director, manager, company secretary or employee of the company or company who does not do anything that he is required to do or not to do according to this Act, or does not comply with the duty or not to do the work that he is required to do, or does not comply with the time limit or custom, or does not inform the office that he is required to be informed or does not submit the details to be submitted to the office.

Companies Act 2063

Chapter 17 Proceeding Of Lawsuits And Punishments

Section 163 : Realisation of amount of loss
If a director, officer of an company or a person causes any loss or damage to the company or shareholder or creditor or any other person by committing an offense punishable under this Act or by violating any provision contains in this Act or the memorandum of association or articles of association or consensus agreement, the aggrieved company, shareholder, creditor or any person shall be entitled to have realised the amount of such loss or damage. He /She shall personally bear the amount of such loss or damage.
Companies Act 2063

Chapter 18 Audit Committee

Section 164 : Audit Committee
1) A listed capital with paid up capital of thirty million rupees or more or a company which is fully or partly owned by the Government of Nepal shall form an audit committee under the Chairpersonship of a director who is not involved in the day-to –day operations of the company and consisting of a least three members .
2) An person who is a close relative of the chief executive of a company shall not be eligible to be a member of the audit committee formed pursuant to Sub-section (1) .
3) At least one member of the audit committee shall be an experienced person having obtained professional certificate on accounting or a person having gained experience in accounting and financial field after having obtained at least bachelor’s degree in accounts, commerce, management, finance or economics.
4) The report of board of directors required to be prepared by a company shall set out a short description of the activities of the audit committee, working policies adopted by the board of directors to implement the suggestions ,if any ,given by the audit committee, the allowances or facilities ,if any, received by the members or the audit committee and the names of the members of audit committee.
5) The audit committee may, for inquiring into any matter, notify the managing director of the company, chief executive or the company or other director, auditor, internal auditor and accounts chief involved in the day-to-day operations of the company to attend its meeting; and it shall be their duty to be present in the meeting of that committee if they are so notified.
6) The board of directors shall implement the suggestions given by the audit committee in respect of the accounts and financial management the company; and where any suggestion cannot be implemented, the board of directors shall also mention the reasons for the same in its report.
7) An company shall arrange for such means and resources as may be adequate for the fulfilment of responsibilities of the audit committee; and the audit committee may fix its internal rules of procedures on its own.
8) The chairperson of the audit committee shall be present in the annual general meeting of the company.
9) The audit committee shall meet as per necessity.
Companies Act 2063

Chapter 18 Audit Committee

Section 165 : Functions, duties and powers of audit committee
The functions, duties and powers of the audit committee formed pursuant to Subsection (1) of Section 164 shall be as follows:
(a) To review the accounts and financial statements of the company and ascertain the truth of the facts mentioned in such statements;
(b) To review the internal financial control system and the risk management system of the company;
(c) To supervise and review the internal auditing activity or the company;
(d) To recommend the names of potential auditors for the appointment of the auditor of the company, fix the remuneration and terms and conditions of appointment of the auditor and present the same in the general meeting for the ratification thereof;
(e) To review and supervise as to whether the auditor of the company has observed such conduct, standards and directives determined by the competent body pursuant to the prevailing law as required to be observed in the course of doing auditing work;
(f) Based on the conduct, standard and directives determined by the competent body pursuant to the prevailing law, to formulate the polices required to be observed by the company in respect of the appointment and selection of the auditor;
(g) To prepare the accounts related policy of the company and enforce, or cause to be enforced, the same;
(h) Where any regulator body has provided for the long term audit report to be set out in the audit report o f the company, to comply with the terms required to prepare such report;
(i) To perform such other terms as prescribed by the board of directors in respect of the accounts, financial management and audit of the company.
Companies Act 2063

Chapter 19 Provisions Relating To Company Not Distributing Profits

Section 166 : Establishment of company not distributing profits
1) Notwithstanding anything contained elsewhere in this Act, any company may be incorporated to develop and promote any profession or occupation or to protect the collective rights and interests of the persons engaged in any specific profession or occupation or to carry on any enterprise for the attainment of any scientific, academic, social, benevolent or public utility or welfare objective on the condition of not distributing dividends.
2) Any person or trustee of a public trust registered pursuant to the prevailing law or any other corporate body incorporated pursuant to the prevailing law who wishes to register a company for the attainment or the objective mentioned din Sub-section(1) may make an application to the Office pursuant to Section 4.
3) The number of promoters promoting a company pursuant to sub- section (1) shall be at least five; and after the incorporation such company, it may have any number of its members, with a minimum of five members.
4) The membership of a company incorporated pursuant to Subsection (1) shall not be transferable in any manner. The membership of any person or body shall ipso facto be terminated in the event of death, cancellation of registration or dissolution of such member or amalgamation of such member with another body or company.
5) Except with the prior approval of the Office, a company incorporated pursuant to Sub-section (1) shall not add words such “company : , “ limited “’ or “private limited” at the end of its name.
6) A company registered pursuant to Sub-section (1) shall obtain approval of the Office to expand its branch.
Companies Act 2063

Chapter 20 Interim Provisions Relating To Company Advisory

Section 168 : Formation of Company Advisory Board
(1) The Government of Nepal shall, by a notification published in the Nepal Gazette, form a Company Advisory Board comprising a maximum of nine members consisting of one person from each of the fields of law, accounting profession, tax administration, commerce or trade administration, from amongst those who have done at least bachelor’s degree in the respective fields and gained expertise after having served for at least seven years 177 in such fields in the government and private sectors, as well as a representative of the Federation of Nepalese Chamber of Commerce and Industries, so as to study the practical problems coming across in the field of implementation of this Act and prevailing law relating to company administration and give advice, as required, to the Government of Nepal on timely reforms to be made in the prevailing companies law and reforms in the company administration. The Registrar shall be the member secretary of the Company Advisory Board.
(2) While forming the Company Advisory Board pursuant to sub –section (1), the notification shall designate any one of the members of the Board also to act as its chairperson .
(3) The Company Advisory Board shall submit to the concerned Ministry of the Government of Nepal, an annual report on the activities carried out by it pursuant to Sub-section (1) .
(4) The concerned Ministry shall publish the report submitted pursuant to Sub-section (3) and make arrangement so that the general public can obtain a copy of such report at a reasonable price.
Companies Act 2063

Chapter 20 Interim Provisions Relating To Company Advisory

Section 170 : Provisions relating to secretariat and employee of Company Advisory Board and Company Board
1) The secretariat of the Company Advisory Board to be formed pursuant to Section 168 shall be situated in the Company Register’s Office.
2) The secretariat o the Company Board to be formed pursuant to Section 169 shall be situated in the Ministry of Industries.
3) The secretariat of the Company Board shall have such number of employees as specified by the Government of Nepal.

Companies Act 2063

Chapter 20 Interim Provisions Relating To Company Advisory

Section 171 : Dissolution of Company Board
1) The Company Board formed pursuant to Section 169 shall ipso facto be dissolved on the date on which the Government of Nepal designates the Court as referred to in this Act, by a notification published in the Nepal Gazette.
2) On the dissolution of the Company Board pursuant to Subsection (1), the appointment of the Chairperson, members and other employees serving in the Board shall ipso facto be terminated; and no compensation or additional amount shall be paid to them for such termination where any employee were disputed by other offices to the Board, their deputation shall ipso facto be terminated.
3) On the dissolution of the Company Board pursuant to Subsection (1), all cases, and petitions related thereto, filed in and under consideration of or yet to be decided by the Board under this Act shall be transferred to the Court .
Companies Act 2063

Chapter 21 Miscellaneous

Section 172 : Record of company and use of computer
1) The records of any minute book, shareholders or debenture holders register, index of shareholders, books of account, accounts etc. required to be maintained by a company pursuant to this Act may be maintained either by making entries thereof in separate books or by recording the same by any electronic communication device and computer in a non-legible form or in any other manner, without prejudice to the provisions contained in this section.2) In case where the records of any minute books, shareholder or debenture holder register index of shareholder, books of account, accounts etc. have not been maintained by making entries thereof in a record book but maintained in any other manner, the following provisions shall be applicable.
(a) If it is easily accessible to the place where the records of such minute book shareholder or debenture register index of shareholder books of account, accounts, etc. are maintained and where such records can be inspected or copes thereof can be obtained, such records shall be deemed to have been maintained in any specific place.
(b) The company shall make adequate arrangements that no one can destroy or alter the records as referred to in Clause (a) and that the matters recorded therein can be easily traced and inspected and copies thereof can be obtained .
(c) Where any matter has been so recorded that it is not legible, the matter shall be capable of being reproduced in a legible form .
3) Where the records of any minute book , shareholder or debenture-holder register, index of shareholders , books of account, accounts etc. are put in an web site by using any electronic communication device or computer pursuant to this section, arrangements shall be made so that the date of such preparation of documents as well as the date of amendment thereto can be easily seen .
4) Where a company has maintained the records of any minute book , register, index , books of account, accounts etc. maintained pursuant to this Act in a non-legible form and any law establishes the obligation of the company to allow such records for inspection or to submit copies thereof , then it shall be the obligation of the company to make such arrangements that the relevant portions of such records can be inspected and that copies thereof can be submitted in a visible or legible form.
Companies Act 2063

Chapter 21 Miscellaneous

Section 173 : Conversion of corporation owned by government of Nepal into Company
1) If the Government of Nepal wishes to convert a public corporation incorporated under the prevailing law, fully or partly owned by the Government of Nepal, or a development board formed under the Development Board Act, 2013 (1956) into a company ,such corporation or board can be converted into a public company and incorporated under this Act.
2) Not withstanding anything contained elsewhere in this Act, there shall be no restriction on the number of promoter, shareholders, in the incorporation of a company as referred to in Sub-section (1).
3) The movable and the immovable properties of the corporation or board as referred to in Sub-section (1) may be valuated and converted into the share capital of the company to be incorporate d pursuant to Sub-section (1), and where such conversion is made, all assets and liabilities of such corporation or board shall devolve on such company, except as otherwise provided in the articles of associations.
4) Not withstanding anything contained elsewhere in this Act, the number of directors of a company incorporated under this section shall be as specified in the articles of association of the company; and no such directors shall be required to subscribe any shares to become a director.
5) A company as referred to in this section may sell its shares in bulk to the private sector through the stock exchange or directly by negotiations.

Companies Act 2063

Chapter 21 Miscellaneous

Section 174 : Predecessor to handover charge to successor
The documents and records in the charge of any director or any other officer or employee of the company who has been appointed to work in his place after the breakdown of his reinstatement shall be submitted to the present director or officer or employee within thirty days of the breakdown of his reinstatement.
Companies Act 2063

Chapter 21 Miscellaneous

Section 175 : Transactions between associated companies
1) Where an agreement or arrangement is made between the following companies whereby any company directly or indirectly provides loan or other kinds of financial assistance, pays any liability, provides guarantee or any other kind of security to another company or any other transactions other than an ordinary business transaction is done between them, it shall be deemed to be a transaction between the associated companies:
(a) Any company and its holding company;
(b) Any company and any subsidiary company of its holding company;
(c) A subsidiary company of any company and the holding company of such company;
(d) A subsidiary company of any company and another subsidiary company of its holding company.
2) Where any transactions as referred to in sub section (1) is carried on , the associated company shall give a notice on such transactions, also setting out a following details to its shareholders and the Office as soon as possible:
(a) Date of transaction and the parties involved in the transactions;
(b) Nature of transaction, and where transaction such as provision of a loan ,provision of financial assistance and furnishing security has taken place under such transaction, the amount or the value thereof.

Companies Act 2063

Chapter 21 Miscellaneous

Section 176 : Restriction on transaction between companies
(1) No company shall, directly or indirectly, transfer its paid-up capital and accumulated profits (up to sixty per cent of the free reserve or the accumulated profit (up to hundred per cent of the free reserve, whichever is higher) to any other company, or give security against any loan taken by any other company, or invest in the securities of any other company.
Provided that this provision shall not apply in respect of a company engaged in banking or financial transactions, an insurance company, a company whose primary object is the purchase, sale or investment of securities, a private company which has not taken loans from banks or financial institutions, a company for the purpose of providing physical infrastructure facilities and an investment made by the principal company in its wholly owned subsidiary, the security given to that company and the collateral given against the loan taken by that company and the investment made in the entitled shares issued under this Act.
(2) Subject to sub-section (1), the company shall keep the particulars as prescribed in respect of any security given to any other company, investment made in such company or security given in respect of any loan taken by such company.