Articles of Association Nepal drafting is frequently questioned by entrepreneurs and corporate professionals establishing business entities. Are you uncertain about what internal governance rules must be included, how shareholder rights should be protected, or what director powers need definition? Understanding Articles of Association Nepal requirements is essential because this document serves as the company's internal constitution, governing day-to-day operations and management structures.
The Articles of Association Nepal (नियमावली in Nepali) operates alongside the Memorandum of Association to form the complete constitutional framework of a company. While the MOA defines external relationships and objectives, the AOA regulates internal affairs—director appointments, shareholder meetings, voting procedures, and profit distribution. Consequently, careful drafting prevents governance disputes and ensures smooth corporate operations.
Furthermore, the Companies Act, 2063 mandates AOA submission to the Office of Company Registrar (OCR) before incorporation is complete. The document must be written in Nepali and comply with specific formatting standards. This comprehensive tutorial is presented to clarify every aspect of Articles of Association Nepal legal requirements and drafting procedures.
Articles of Association Nepal are the internal regulations that govern company management, shareholder relations, and operational procedures. Governed by Chapter 3 (Section 20) of the Companies Act, 2063, the AOA functions as a contractual agreement between the company and its members, as well as among members themselves.
Moreover, Articles of Association Nepal define the powers and duties of directors, the rights of shareholders, and the procedures for conducting meetings and making decisions. As a result, the AOA provides the procedural framework within which the company operates, while remaining subordinate to the Memorandum of Association and the Companies Act itself.
In addition, the AOA is a public document filed with OCR, accessible to third parties. Therefore, provisions affecting external relationships must be drafted carefully to balance internal flexibility with public transparency.
| Aspect | Memorandum of Association | Articles of Association |
|---|---|---|
| Primary Focus | External scope and objectives | Internal governance and management |
| Legal Supremacy | Higher authority; AOA cannot contradict | Subordinate to MOA and Companies Act |
| Binding Effect | Binds company and external world | Binds company and members internally |
| Amendment Difficulty | Difficult; requires special resolution and OCR approval | Easier; special resolution typically sufficient |
| Content Requirements | Six mandatory fixed clauses | Flexible based on company needs |
| Conflict Resolution | MOA prevails in case of inconsistency | Must be read consistently with MOA |
The Companies Act requires comprehensive coverage of internal governance matters. Therefore, the following key components must be included in Articles of Association Nepal:
The drafting process is structured sequentially. Therefore, following these steps ensures compliant Articles of Association Nepal preparation:
Study Chapter 3 of the Companies Act, 2063, particularly Section 20, to understand mandatory provisions. Review any specific requirements for your company type (private, public, or non-profit).
Identify company-specific governance needs:
Prepare the AOA in clear, legal Nepali terminology. Key sections should include:
Ensure consistency with MOA provisions. The AOA cannot expand beyond MOA objectives or contradict liability clauses.
Qualified corporate lawyers should review for:
All founding shareholders must sign the AOA, with each page initialed. Witness attestation is required. The document is submitted to OCR alongside the MOA and other incorporation documents.
Several errors frequently occur during AOA preparation. Therefore, awareness prevents future governance complications:
| Mistake | Consequence | Prevention |
|---|---|---|
| Contradicting MOA provisions | Legal invalidity of AOA clauses | Cross-reference MOA during drafting |
| Unclear voting procedures | Deadlocks and decision-making paralysis | Specify quorum, majority requirements, and tie-breaking |
| Inadequate director removal provisions | Difficulty replacing ineffective directors | Include clear removal grounds and procedures |
| Missing pre-emptive rights | Unwanted dilution of shareholding | Explicitly state pre-emption procedures |
| Vague dividend policies | Shareholder disputes over profit distribution | Define dividend declaration timing and calculation |
| No dispute resolution mechanisms | Expensive litigation for internal conflicts | Include arbitration or mediation clauses |
| Inconsistent share transfer rules | Confusion over ownership changes | Clearly specify approval requirements and timeframes |
| Omitting alternate director provisions | Operational disruption when directors unavailable | Provide for alternate appointment mechanisms |
Business evolution may necessitate AOA changes. Therefore, understanding the amendment process is essential:
Articles of Association Nepal requirements vary by company structure:
The AOA serves as the primary mechanism for protecting shareholder interests. Therefore, key protections include:
The AOA defines the scope of director authority. Therefore, careful drafting balances operational efficiency with accountability:
Directors owe duties to:
Certain decisions typically require shareholder approval:
The MOA defines the company's external scope, objectives, and powers—what the company can do. The AOA governs internal management, shareholder rights, and operational procedures—how the company does it. The MOA has higher legal authority, and the AOA cannot contradict it.
Yes. Every company registered under the Companies Act, 2063 must have Articles of Association. Single-person companies may use the prescribed format without separate drafting, but multi-shareholder companies must prepare customized AOAs.
No. Amendment requires special resolution (75% majority) at a General Meeting. The amended AOA must then be filed with OCR for registration.
The Companies Act prevails. Any AOA provision contradicting the Act is void. The AOA must be read consistently with mandatory legal requirements.
Generally, no. The AOA primarily binds the company and its members. However, provisions affecting external relationships (such as director authority limits) may affect third parties with notice.
Yes, through shareholder agreements. However, such agreements cannot contradict the AOA or prejudice the company. Pre-incorporation consensus agreements must be filed with OCR.
Sufficiently detailed to prevent ambiguity, but flexible enough to accommodate operational needs. Overly rigid provisions may require frequent amendments; overly vague provisions may lead to disputes.
The AOA provides the framework for resolving conflicts through specified voting procedures, meeting protocols, and dispute resolution mechanisms. Courts refer to AOA provisions when adjudicating corporate disputes.
Yes, provided they comply with FITTA and Companies Act requirements. Common provisions include director nomination rights, reserved matters requiring consent, and exit mechanisms.
While not legally mandatory, professional drafting is strongly recommended. Errors or omissions may lead to governance disputes, operational restrictions, or regulatory non-compliance.
Articles of Association Nepal serve as the operational backbone of corporate governance. Therefore, meticulous attention to drafting ensures smooth management, protected shareholder rights, and regulatory compliance.
Consequently, engagement of qualified legal professionals for AOA preparation is strongly advised. The document's complexity and long-term implications warrant expert guidance to balance flexibility with enforceability.
For professional assistance with Articles of Association Nepal drafting and amendment, Attorney Nepal provides comprehensive corporate legal services. Their team of company law specialists ensures AOA compliance with Companies Act requirements, robust governance frameworks, and seamless OCR registration processing.
Contact Attorney Nepal today to draft your Articles of Association with legal precision and strategic foresight.
February 15, 2026 - BY Admin