Only the audited documents are accepted by the office of the company registrar. Every company needs to have its financials audited. The financials must include the compensation of the salary, and it has to be verified.
The appointment of the auditor has to be followed according to the process directed by the directives. In addition, the appointment differs according to the nature of the company.
Besides the operative and functional, the directives also direct the company's dismissal and revoking of its registration. The sections and sub-sections listed below provide all the necessary information.
60. The Office May Appoint Auditors
(1) The office may appoint an auditor in the following cases.
a. If the annual general meeting of the company cannot be held.
b. In the absence of an agreement on the appointment of an auditor for such an annual general meeting even though the company has an annual general meeting.
c. If the appointed auditor is disqualified, dies, resigns, or the appointed auditor cannot be retained for any reason.
(2) In case of any situation as per subsection (1), the company's Board of Directors shall disclose the matter and make a written request for the appointment of an auditor in the office.
(3) In the written request pursuant to subsection (2), the Board of Directors shall disclose the names of at least three persons eligible for audit appointment and the details of the remuneration to be paid to them.
(4) Upon the receipt of the written request pursuant to subsection (2), the office may appoint the person as it deems fit. The auditor's remuneration thus appointed shall be borne by the company concerned.
(5) If an auditor of a company has been appointed pursuant to subsection (4), such company shall not have to inform the office separately about the appointment of an auditor.
(6) Except as otherwise provided in the Companies Act, Memorandum of Articles and Articles of Association of the company, the audit report to be submitted to the office by the private company shall be approved by all the shareholders of the company and all the members of the Board of Director.
61. Appointment of Auditor in Foreign Company
(1) According to the law of any foreign country, a company established as a public company and registered as a foreign company in Nepal cannot appoint the same auditor, its partner or ex-partner or employee or ex-employee more than three times in a row.
However, this restriction does not apply to a partner who leaves the partnership three years ago or an employee who leaves the service of such an auditor.
62. Inspection Expenses Incurred by the Office
(1) Expenditure incurred while inspecting the work of the company assigned by the inspector shall be borne by the company concerned.
(2) Even if it is seen that the operator or the company's office has committed malice, fraud, forgery or fraud while inspecting the company's work, the expenses incurred in the chequebook shall be recovered by the office from the company. The company may collect the said amount from the concerned operator or official.
63. Determining the Expenditure of Investigation
(1) The cost incurred in determining the cost of investigation by the office shall include the following expenses:
a. Remuneration determined by the office, based on professional experience or rank of the person employed in the investigation.
b. Meals and accommodation to be received by the company's executive head and concerning convenience.
c. The actual cost of living if no provision has been made in the company concerned for such facility.
d. The actual cost of using fast and easy means of transportation.
e. The actual cost of preparing the report.
64. Voluntary Dissolution of the Company
(1) If the company is able to pay all its debt obligations, the shareholders may dissolve the company by passing a special resolution in the general meeting.
(2) Notwithstanding anything contained in subsection (1), the dismissal of a company in the rules of the company's Memorandum of Articles or by consensus, if any provision has been made in this regard, the company may be dissolved according to the same provision.
(3) The company may be dissolved if such conditions are met as provided in the following conditions in the Articles of Association or Memorandum of Articles or the consensus agreement as follows:
a. If a fixed period of operation of the company is fixed after the expiration of that period.
b. The company will be disbanded if such an incident mentioned in the arrangements has taken place.
(4) If the general meeting of the company does not have the authority to decide on the dissolution of the company, then who has such authority and from which decision process the company can be dissolved shall also be disclosed in the Memorandum of Article, Articles of Association or unanimous agreement of the company.
(5) A company going into liquidation pursuant to subsection (3) shall also appoint one or more auditors and liquidators to carry out the work related to the dissolution as per the provisions made in the Articles of Association, Memorandum of Articles or consensus agreement.
(6) Notwithstanding anything written in subsections (1) and (2), a company in damages cannot be voluntarily disbanded. Dissolution of such a company shall be in accordance with the prevailing law on bribery.
65. Operators Shall Make a Written Declaration
(1) Pursuant to section 64, all the directors of the company to be dissolved shall make a written declaration that the company may repay all its debts and obligations within 1 year from the date of passing the proposal.
(2) Written declaration pursuant to subsection (1) of section 64 shall be made.
(3) The operators shall have to make a written declaration pursuant to subsection (1) only after a thorough investigation of all the company's business operations.
(4) The financial statements should have been audited by the auditor. The company's financial statements should be prepared at least 15 days before the announcement of the Board of Directors to show the real financial condition of the company.
66. Voluntary Revoking of Registration
(1) The founders of a company may apply to the office to get the registration of the company revoked on the ground that the company's business could not be started.
(2) If a company which has come into operation once is unable to conduct later for any reason, an application as per subsection (1) cannot be filled. Such a company have to go through the process of voluntary dismissal or extortion.
(3) When the founders of a company having more than one founder submit an application under subsection (1), the founders agree to purchase at least 75% of the total number of shares agreed to be taken by the founders in such application.
(4) With an application pursuant to subsection (1), the company shall not have to pay any amount to anyone, and the application founders shall declare in writing that the company has not conducted its business. In addition, the transaction conducted by the company will have to be certified and submitted by a registered auditor.
(5) Within 15 days from the date of receipt of the application pursuant to subsection (1), the office shall publish the information about the revocation of the registration in the national daily newspaper. Such information will be tossed in the office and, as far as possible, will be kept on the office's website address.
(6) If there is any reason not to revoke the registration of the company whose registration is about to be revoked, from the date of publication of notice as per subsection (5), a written application can be submitted within 35 days of such request. You also need to provide evidence to substantiate your claim.
(7) The office shall revoke the company's registration if there is no objection to the claim of any person regarding the revocation of registration of the company or if the application filed under subsection (6) is not reasonable. The information about the de-registration should be published in the national level newspaper.
67. Other Conditions and Procedures for Revocation of Registration
(1) The office may revoke the registration of the company even in the following cases:
a. Failure to submit details as per section 80 of the Act or non-payment of penalty under section 81 for three consecutive financial years. Or,
b. If there is any reasonable ground for the office to believe that the company has not conducted its business or the company is not operating on the basis of evidence obtained in connection with its administration.
(2) If the registration of a company has to be revoked pursuant to subsection (1), the office shall inform the concerned company in accordance with the Act before revoking the registration openly.
(3) The information pursuant to subsection (2) shall be published in the national daily newspaper. Such information will be posted in the office and as far as possible on the office's website address.
(4) Pursuant to subsection (2), if there is any reason why the registration of the company should not be revoked within 2 months from the date of receipt of the notice, the company can file an open application.
(5) Pursuant to subsection (3), if there is any reason why the registration of the company should not be revoked within 2 months from the date of publication of the notice in the national level daily newspaper, the shareholders, the owner, or other stakeholders of the company may apply to the office.
(6) The office shall revoke the registration of the company if no application has been received as per subsections (4) and (5) or if the application has been received, but the reason mentioned in the application is not reasonable.
(7) Notwithstanding anything contained elsewhere in this Article, the registration of the company in which the proceedings have been initiated, or proceedings are being carried out in accordance with the prevailing law on commissions shall not be revoked.
68. Registration Repeal Expenses
The expenses incurred in revoking the registration as per Articles 66 and 67 shall be borne by the company concerned. If the company cannot bear such expenses, the applicant founder or operator will have to bear the number of such expenses.