With globalization, aspects of each activity are now intertwined with the components of the economy. The concept of shared economy has flourished and people can benefit standing on their grounds even if they are not huge investors or businesspersons. The model of entrepreneurship has come a long way with multiple choices entrepreneurs can hold onto for economic gain. But to take advantage of everything it is crucial that the entrepreneurs first go through company registration process.
Entrepreneurship has arrays of scopes. Individuals vying for financial gain opt for small and medium scale enterprises (SME) to invest in. It’s where they are prepared to inject money to scale up their businesses. On the other hand, the concept of startups has become popular amongst prospective entrepreneurs having innovative ideas.
Startups are run with the aim of contributing to the solution to a problem existing in society. They don’t expect their businesses to accelerate at the pace of a rocket. Although the growth is not steady, they want to be recognized for the innovative work they have introduced to the world.
The first stage of any business
Starting a business is not an end to the entrepreneurial journey. In fact, running a company is a huge responsibility. One should be responsible for different aspects of society. And getting it legalized is the foremost responsibility. Company registration is the first stage of the establishment of a company. Be it small or large scale, company registration is important for it authenticates and increases the legitimacy of a company.
The registration of a company is a go-sign for startups to operate their businesses legally. They become a legally-recognized entity in the eyes of people, who want to be involved in or deal with the company. The registration makes it easier for any company to record account details.
It is also an assurance for the investors that the entity is genuine. Very few will show interest in investing if the company is running without legal documents. And it also makes getting loans easier as compared to the company that is running without registration.
The problem with company registration
There are, however, some problems startups are facing while going for registration. As startups are innovative and bring in new concepts in the business fraternity, startups lack a category that fits the company’s nature.
Biddha Nanda Jha, founder of Orange Ball Pvt. Ltd., a pest-control service, says he had a hard time while registering his company. “There was no category identifying our service so we had to adjust in another category that meets some of the descriptions,” he shares.
Not too long ago, issues of Tootle and Pathao enraged many as there was no clarity in startup law. Had they been clear about the correct way of operation and their responsibilities after the registration, there would not have been a place for such a commotion.
Startups are risky and the market is unpredictable. If a startup fails to achieve its goal, its chances of getting dissolved are higher. This is one of the reasons why startups tend to remain unregistered. They think of registering their companies only if they do well in the market.
Meanwhile, most startups cannot list themselves as a profit-making company. So, the initial operations, without being registered, relax the founders from the business taxes they would otherwise be liable to pay to the government.
Startups also wish that the government introduce a provision in which the companies be kept for a probation period, while they figure out if their businesses are viable and if they want to continue. “The companies will proceed with registration after the period if they feel that they are ready,” Jha adds.
Most of the startups are experimental businesses and nobody pays much attention to its legal aspect. However, getting the business legalized intensifies credibility and efficiency factors of a company. So, it is a must for all businesses.
How to register your company?
Companies in Nepal are registered at the Office of Company Registrar, a body under the Ministry of Industry, Commerce, and Supplies. An applicant should present a properly filled application, two copies of the article of association, two copies of the article of the memorandum, attested copies of the citizenship certificates of the founder shareholders, and a copy of the mutual agreement to the Office.
According to the Office of Company Registrar, if circumstances to reject the company registration do not exist, the registrar decides to register the company. The founders are then notified to pay the registration charge and collect the certificate.