This is in Nepali and English both medium. Which may helpful you. Please follow me for other PPT slide of this class.

1. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
Learning Objectives: Upon completion of this chapter, the students should
be able to
 Understand the meaning, concept and characteristics of company
 Explain the types of companies
 Know the main documents of a company and their legal provision
Chapter 1: Company and its formation, types & documents
-sDkgL tyf o:sf] :yfkgf, k|sf/ / k|n]vx?_

2. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
Company is an artificial person created by law to carry on a business for the profit with distinct legal existence.
The company has transferable shares, limited liabilities, perpetual succession & a common seal. The company is
managed by the representatives of shareholders called board of directors. In other words “company is a voluntary
association of individuals for profit having capital divided into transferable shares the ownership is the condition
of membership”. According to Nepal Company Act 2063 “A Company refers to any company formed and
registered under this act”.
James Stephenson:‘A company is and association of many persons who contributes money or money’s worth to
common stock and employ it in some trade or business and who share the profits and losses arising there form.’
Prof. Honey, “ Company is an artificial person created by law, having separate entity with a perpetual succession
and a common seal.”
A company is a voluntary association of a group of people willing to carry out a business for which the major part
of the capital is collected by selling the shares or debentures to the general public. It is an artificial person, which
is created by the specific law with a perpetual succession. There comes a existence of a company to overcome the
limitations of the sole proprietorship and partnership and to facilitate larger scale of production.
1.1: Meaning and Concept of company -sDkgLsf] cy{ tyf cjwf/0ff_

3. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
gfkmf sdfpg] p2]Zon] sfg'gåf/f l;h{gf ul/Psf] s[lqd JolQm g} sDkgL xf] . of] :jP]lR5s JolQmx?sf] ;d"x xf] . hxfF ljleGg
Joj;flos lqmofsnfk ;~rfng ug{ cfjZos kg]{ k'FhL ;+sng ug]{ JolQmx?nfO{ z]o/xf]N8/ elgG5 . dflg;x?n] sDkgLsf]
dflnssf] ?kdf z]o/ wf/0ff ub{5g . sDkgLn] cgGtsfn;Dd hLljt /xg] cl:tTj af]s]sf] x'G5 . s'g} Ps z]o/xf]N8/ 6f6
klN6Pdf jf p;sf] d[To' ePdf klg sDkgL eg] hLljt eO/xG5 . gfkmfgf]S;fg afF8kmfF8 ug]{ dg;fon] Joj;flos lqmofsnfk
;~rfng ug{ cfjZos kg]{ 7'nf] dfqfdf k'FhL k|bfg ug]{ sfg'gL dfGotf k|bfg ul/Psf] P]lR5s ;+:yf g} sDkgL xf] . sDkgLsf]
:jfldTj x:tfGt/0f of]Uo z]o/df ljefhg ul/Psf] x'G5 .
James Stephenson sf cg';f/,Joj;fo ;+rfng ug{ cjZos k"‘hL nufgL ug]{ JolQmx?sf] ;d'x sDkgL xf] . hf]
Joj;foaf6 cflh{t gfkmf gf]S;fg jf‘8kmf‘8 ug{ tof/ x'G5 .
Prof. Honey sf cg';f/, sDkgL sfg'gåf/f l;h{gf ul/Psf] s[lqd JolQm, 5'66} cl:tTj af]s]sf], ;femf 5fk ePsf] /
cgGtsfn;Dd rln/xg] Joj;flos ;+:yf xf] .
sDkgL P]g @)^# cg';f/, sDkgL eGgfn] To:tf] sDkgLnfO{ hgfpFb5 h'g sfg'g cg';f/ l;h{gf / btf{ ePsf] x'G5 .
lgisif{df sDkgL sfg'gåf/f lgld{t Pp6f s[lqd tyf cb[Zo JolQm xf] . h'g gfkmf sdfpg] p2]Zon] :yfkgf ul/Psf] x'G5 . of]
s'g} vf; gfd tyf 5fk ;lxt s[lqd JolQmsf] ?kdf cl:tTjdf /x]sf] x'G5 . sDkgLnfO{ z]o/xf]N8/x? elgg] JolQmx?af6
ag]sf] Pp6f ;+u7gsf] ?kdf klg JofVof ug{ ;lsG5.

4. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
1.2. Characteristics of a company:
i. Artificial Person sfg"gL jf s[lqd JolQmTjM
A company is an artificial person, which is created by law. It exists only in contemplation of law and,
therefore, has no physical shape or form. Although invisible and intangible, as a legal person, it enjoys
almost all the rights of a natural person. It has the rights to enter into contracts and it can buy and sell the
properties in its own name.
sDkgL Ps s[lqd JolQm xf], hf] sfg"g åf/f agfO{Psf] xf] . of] s]jn sfg"gsf] wf/0fdf cjl:yt x'G5 / o;}sf] s'g} ef}lts cfsf/ x'Fb}g. of]
cb[Zo / cd"t{ x'G5 . sfg"gL JolQmsf] ¿kdf, o;n] Ps k|fs[lts JolQmsf] ;a} clwsf/ k|fKt ub{5. o;nfO{ s/f/df k|j]z ug]{ clwsf/ x'G5 /
o;n] ;DkQLx¿ cfˆg} gfddf lsGg / a]Rg ;Sb5.
ii. Perpetual / Permanent existence lg/Gt/ / :yfoL cl:tTjM
Being an independent body, the life of the company is not connected with the life of its shareholders. The
law creates the company and the law brings it to an end. It is a corporate body. Its shareholders may
transfer their shares and new persons may come in their place but the existence of the company is not
affected.
;+o'Qm k"FhL sDkgLsf] cl:tTj :yfoL k|s[ltsf] x'G5. Psnf}6L / ;fem]bf/L h:tf] ;+o'Qm k"FhL sDkgLsf] cl:tTj Joj;fosf] dflns;Fu ufFl;Psf]
x'Fb}g . o;sf] 5'6} sfg'gL cl:tTj x'G5 / z]o/wgLx¿sf] d[To' x'g', 6f6 klG6g' jf Joj;fo kl/Tofu ug{' cflb h:tf sfo{af6 Joj;fosf]
cl:tTjdf s'g} k|efj kb}{g . Joj;fo lg/Gt/ rln/xG5 .

5. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
iii. Limited liability ;Lldt bfloTjM
The limited liability is another important features of a company. If anything goes wrong with the
company, the shareholder’s liability is limited by the amount of the shares held by him. In other
words, other than the money one has invested, one cannot be called upon to pay even a single
paisa more out of one’s pocket in order to meet the company’s obligations.
;+o'Qm k"FhL sDkgLsf] csf]{ dxQjk"0f{ ljz]iftf o;df ;+nUg z]o/wgLx¿sf] bfloQj ;Lldt x'g' xf]. sDkgLsf] C0f ltg{
sDkgLaf6 g;lsPsf] v08df z]o/wgLx¿sf] JolQmut ;DklQ laqmL u/L c;'n ug{ kfOb}g . c+lzof/x¿sf] bfloQj pgLx¿n]
vl/b u/]sf z]o/sf] e'QmfgL ug{ afFsL /sd;Dd dfq ;Lldt x'G5 .
iv. Common seal ;femf 5fkM
As the company has no physical form, it cannot sign any contract in its name. Therefore,
originally, all documents and contract papers require the affixing of the seal. Most of the
transactions are signed by the directors who act as agents of the company. It uses a common seal
for its official signature. Therefore, any document without common seal of the company is not
taken into consideration and the company is not liable for the same.
sDkgL Pp6f s[lqd JolQm ePsf]n] k|fs[lts JolQmn] h:t} cfkm} sfd ug{ tyf x:tfIf/ ug{ ;Sb}g. o;n] cfˆgf clws[tx?
dfkm{t sfd ug{ ;Sb5 . o;/L sfd ubf{ sDkgLn] cfkmgf] sfdsf] cflwsfl/stfsf] nflu 5fk k|of]u ub{5. sDkgL ;DaGwL k|To]s
sfuhftdf oxL 5fk nufO{ sfo{ ;Dkfbg ul/G5 .

6. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
v. Transferability of shares z]o/sf] x:tft/0fLotfM
The shares of a company are transferable except in the case of private limited companies.
The shares, especially of a public limited company, are easily transferable form one person
to another without prior permission of the company management. A shareholder can convert
his shares into cash easily either by selling or transferring the shares to other persons. This
transfer of shares changes the ownership but does not affect the regular functioning of the
company.
;+o'Qm k"FhL sDkgLsf z]o/x? :yfGt/0fLo x'G5Gf . lghL sDkgLdf eg] z]o/x?nfO{ ;lhn} x:tfGt/0f ug{ ;lsFb}g . k'FhL
ahf/df ;+o'Qm k"FhL sDkgLsf z]o/x?nfO{ z]o/wgLn] ;lhn} v/Lb ljqmL ug{ ;Sb5g . o;/L z]o/x?sf] vl/b laqmL ubf{
sDkgLsf cGo z]o/wgLx?sf] :jLs[ltsf] cfjZostf kb}{g .
vi. Periodic Audit ;do ;dodf n]vf k/LIf0f :
It is compulsory for each company to get its account to be audited. A joint stock company
has to publish its financial statement at the end of every fiscal year.
;+rfns ;ldlt tyf z]o/wgLx?af6 n]vfk/LIfs lgo'lQm u/L sDkgLåf/f n]vf clen]v r':t b'?:t Pad sfg'gadf]lhd
/flvPsf 5g jf 5}g egL ;do;dodf hfFr jf k/LIf0f ul/G5 .

7. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
1.3. Types of a company:
A. On the basis of number of Member ;b:o ;+Vofsf] cfwf/dfM
1. Private Company gLlh sDkgLM
A private limited company can be formed with the one member but the maximum number of
shareholders cannot exceed fifty and restricts the transfer of share from one shareholder to another. It
is not necessary to issue prospectus to collect share capital. It is not necessary to hold statutory meeting
for private company. The private company must use the words “Pvt.Ltd” at the end of its name.
sDkgLdf ! hgf b]lv %) hgf ;Dddfq ;b:o ;+Vof /x]sf] sDkgLnfO{ gLlh sDkgL -Private Company_
elgG5 . gLlh sDkgLsf] lgodfjnL cg';f/ sDkgLsf] k'FhL ;+sng ug{sf] nflu x:tfGt/0fLo z]o/ tyf C0fkq
lgisf;g ug{ aGb]h nufOPsf] 5.

8. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
Privileges / Characteristics of a private company are as follows;
• Private company can be established by a single person.
• It does not need to publish a prospectus at the time of the issue of its share.
• It need not to obtain the certificate of the business before the commencement of the business.
• It restricts the transfer of shares from one person to another person.
• It is not required to hold statutory meeting
gLlh sDkgLsf ljz]iftfx? tyf 5'6 jf ;x'lnot jf kmfO{bfx?
• Ps hgf JolQmn] dfq klg ;~rfng ug{ ;Sg]
• sDkgL btf{ ug{sf] nflu ljj/0fkq -Prospectus_ ;dfj]z ug{ kb}{g .
• gLlh sDkgL btf{ ug]{ ljlQs} Ohfhtkq k|fKt ug{' cufj} sfo{ k|f/De ug{ ;Sb5g .
• gLlh sDkgLn] cfˆgf] z]o/ Ps JolQmaf6 csf]{ JolQmnfO{ x:tfGt/0f ug{ c:jLsf/ ub{5.
• gLlh sDkgLn] lgodfjnL kq tyf k|jGw kq ;fj{hlgs ug{' kb}{g .

9. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
2. Public Company ;fj{hlgs sDkgLM
A Public company is a company the membership of which is open to the general public under the
provisions of its Articles. The minimum number required for the formation is seven, but there is
no upper limit. It offers its share to public through a Prospectus and any person can apply for its
share. A Public limited company has to obtain the certificate of the commencement before
starting its business along with the time of issuing shares incorporation.
;j{;fwf/0fnfO{ z]o/x? v'Nnf ?kdf ljqmL ljt/0f u/L ;xeflutfd"ns nufgL jftfj/0f -Participative
investment environment_ ckgfpg] sDkgLnfO{ ;fj{hlgs sDkgL elgG5 . o:tf] sDkgLdf sDtLdf &
hgf / a9Ldf hltklg ;b:o ;+Vof /xG5g . sDkgL P]g @)^# cg';f/ ;fj{hlgs sDkgL gLlh sDkgL
geO{ cfjZos kFhL ;+sngsf] nflu ;j{;fwf/0fnfO{ z]o/ tyf C0fkq v'Nnf ?kdf ljqmL ljt/0f ug]{
sDkgL xg . ;fj{hlgs sDkgLsf z]o/x? x:tfGt/0f of]Uo x'G5g . h:t} s[lif ljsf; a}+s, gljn a}+s, d]3f
a}+s cflb o; sDkgLsf pbfx/0fx? xg .

10. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
Importance / Advantages / Characteristics of public company:
• Its share are transferable
• Liabilities of shareholders is limited
• Free to invite people to subscribe to its share and debenture
• Large capital not exceed to register capital can be collected for mass production purposes.
• Need to receive certificate to run business.
• It can issue warrant and convertible securities.
;fj{hlgs sDkgLsf ljz]iftfx? tyf kmfO{bfx?M
• z]o/ :jtGq?kdf x:tfGt/0f of]Uo x'G5g .
• z]o/ ;b:ox?sf] bfloTj ;Lldt xG5.
• OR5fg';f/ h:n] klg z]o/ tyf l8a]Gr/ v/Lb ug{ ;Sb5g .
• btf{ k"‘hL eGbf a9L k"‘hL ;+sng ug{ kfp‘b}g .
• Ohfht kq k|bfg gu/L Joj;fo ;~rfng ug{ ;lsb}g .
• cfZjf;g -Warrant_ / kl/jt{gzLn -Convertible_ ;'/If0f;d]t hf/L ug{ ;Sb5g .

11. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
Differentiate between a private company and a public limited company.
Public limited company Private limited company
A public limited company requires at least 7 members for
its incorporation. Its maximum number is unlimited.
A private limited company can be established by a single
member. Its maximum number is limited to 50.
it requires the ‘certificate of incorporation’and the
‘certificate of commencement of business’ to start its
business.
It requires only the ‘certificate of incorporation’to start its
business.
It does not restrict the transfer of its shares. It restricts the transfer of its shares.
It has to publish its annual financial statements.
It is not required to publish its annual financial statements.
It must file a statutory report. It need not file any statutory report.
It cannot allot shares without receiving the minimum
subscription.
It can allot shares without raising the minimum
subscription.
It uses the word ‘Ltd’ after its name. It uses the words ‘Pvt.Ltd’ after its name.

12. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
B. On the basis of Liabilities bfloTjsf] cfwf/dfM
1. Limited Liability Company ;Lldt bfloTj ePsf sDkgL M
A company in which the liability of shareholders is par value or limited to the extent of the face value of the shares
they have paid for but restricted to the amount of unpaid calls on share. sDkgLdf ;+nUg z]o/wgLx?sf] bfloTj dLldt /xg] u/L
:yfkgf ul/Psf] sDkgLnfO{ ;Lldt sDkgL elgG5 . k|foM cfhef]nL ;a} sDkgLdf ;+nUg z]o/wgLx?sf] bfloTj ;Lldt x'G5 . z]o/ wgLn]
vl/b u/]sf] z]o/ dNo a/fa/ dfq z]o/ wgLsf] bfloTj sDkgL /xG5 .
2. Unlimited Liability Company c;Lldt bfloTj ePsf sDkgLM
A company in which the liability of shareholders tends to be unlimited as partnership. If the company's assets are not
sufficient for paying company obligation then shareholders are required to pay even using their private properties.
sDkgLdf ;+nUg z]o/wgLx? Psnf}6L / ;fem]bf/L Joj;fosf dflns e} sDkgLn] ltg{'kg]{ bfloTj sDkgLsf] ;DkQLn] gk'u]df cfˆgf] gLlh
;DkQL k|of]u u/L e'Qmfg ug{'kg]{ x'G5 . To:tf bfloTj ePsf sDkgLnfO{ c;Lldt bfloTj ePsf sDkgL elgG5.
3. Company Limited by guarantee hdfht4f/f ;Lldt sDkgLM
A Company Limited by Guarantee is a company limited by the shareholders' obligation to pay more than the amount
pledged by the company in case of dissolution of the company. Such guarantee is mentioned in the management letter
of the company. The amount of such security may vary from member to shareholder. lj36gsf] a]nf sDkgLsf] aflx/L kIfnfO{
ltg{'kg]{ bfloTj hlt;'s} ePtfklg cfkm"n] hdfgt lbPsf] /sdeGbf a9L ltg{'gkg]{ u/L z]o/jfnfx¿sf] bfloTj ;Lldt ePsf sDkgLnfO{
hdfgtåf/f ;Lldt sDkgL elgG5 . sDkgLsf] k|aGw kqdf o:tf] hdfgLsf af/]df pNn]v ul/Psf] x'G5 . o:tf] hdfgtsf] /sd k|To]s z]o/
;b:odf km/s km/s x'g ;S5 .

13. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
C. On the basis of Formation or incorporation :yfkgfsf] cfwf/dfM
1. Chartered Company rf6{8 sDkgL : Company created by the head of the state or special charter is called
chartered company. Special charter belongs to king or president of state. East India Company and Bank of
England are the examples of this category. This types of company is not in Nepal and no more popular today.
/fHo k|e'Tjåf/f jf ljz]if rf6{8åf/f :yfkgf ul/Psf] sDkgLnfO{ rf6{8 sDkgL elgG5 . ljz]if rf6{8 eGgfn] /fHosf] /fhf jf /fHosf]
k|dv JolQmnfO{ hgfpF5 . Oi6 OlG8of sDkgL / a]nfotL a}+s rf6{8 sDkgL cGtu{t kb{5g . o; lsl;dsf sDkgLx? g]kfndf 5}gg .
cfhsn Tolt k|efjsf/L dflgb}g .
2. Statutory company a}Bflgs sDkgL : A company registered under statutory law is known as statutory company.
All those companies which is created and operates under the act passed by the state legislature or parliament, are
called statutory company. Nepal Rastra Bank, Agriculture Development Bank, Provident Fund and Nepal
Industrial Development Corporation are the examples of this category.
b]zsf] ljwflosf -;+;b_ af6 ljz]if P]g kfl/t u/L o; sf/sDkgL :yfkgf tyf ;~rfng ul/G5 . g]kfn /fi6« a}+s, s[lif ljsf; a}+s / g]kfn
cf}Bf]lus . lgud a}Bflgs sDkgLsf pbfx/0f x'g .
3.Registered company btf{ jf /lhi68{ sDkgLM All those companies that are registered under the Companies Act,
2063 are called Kegistered Companies. Himal Cement Company, Bhrikuti Pulp and Paper Mills Ltd. and Gorkha
biscuits Pvt. are the examples of this category.
sDkgL P]g @)^# cg';f/ btf{ ePsf ;a} sDkgLx? btf{ sDkgL x'g . lgdf{0f l;d]G6 pBf]u, P]e/]i6 sfuh pBf]u, g]lasf] la:s'6
pBf]u btf{ sDkgLsf pbfx/0fx? x'g .

14. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
D. On the basis of Ownership :jfldTjsf] cfwf/dfM
1. Government Company ;/sf/L sDkgLM
Government Company is company in which at least 51% of the paid-up capital is held by
the government. Himal Cement Company, Janakpur Cigarette Factory, Lumbini Sugar Mill
etc. are Government Company.
slDtdf %! k|ltzt z]o/df ;/sf/sf] nufgL /x]sf] s'g} klg sDkgL ;/sf/L sDkgL x'g . lxdfn l;d]G6
sDkgL, hgsk'/ r'/f]6 sf/vfgf, n'lDagL lrgL pBf]u ;/sf/L sDkgL x'g . %! k|ltzt eGbf sd jf
;/sf/sf] s'g}klg nufgL gePsf sDkgLx? u}/ ;/sf/L sDkgL x'g.
2. Non-government Company u}/ ;/sf/L sDkgLM
Companies owned, managed and controlled by the private sector are Non-government
Company. A minimum 51% of paid-up shares capital is not subscribed by the government.
%! k|ltzt eGbf sd jf ;/sf/sf] s'g}klg nufgL gePsf sDkgLx? u}/ ;/sf/L sDkgL x'g.

15. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
1.4: Advantages of Company form of organization ;+ul7t sDkgLsf kmfO{bfx¿ M
1. Huge amount of capital 7"nf] k"FhL] /sdM
A public company can collect huge amount of capital from its large number of shareholders for large-
scale enterprises. Ps ;fj{hlgs sDkgLn] z]o/sf] dfWodaf6 7"nf] /sd hDdf ug{ ;Sb5 / 7"nf vfnsf pBdx?
;+rfng ub{5 .
2. Limited liability ;Lldt bfloTjM
The members or shareholders of a company enjoy the advantage of limited liability. They cannot be called
upon to pay anything more than the value of the shares held by them. sDkgLsf ;b:o jf ;]o/ xf]N8/x¿n]
;Lldt bfloTj sf] kmfObfsf] cfgGb lnG5g . pgLx¿nfO{ c+lst d"No eGbf al9 s]lx e'QmfgL ug{ af]nfpg ;lsb}g .
3. Permanent existence :yfoL cl:tTjM
A company has permanent existence. Its life does not depend on the life of its members. Therefore, it is
more stable form of business organization. Pp6f sDkgLsf] :yfoL cl:tTj x'G5 . o;sf] hLjg ;b:ox¿sf]
hLjg df lge{/ ub}{g . To;sf/0f, of] Jofkf/ ;+u7g sf] clws l:y/ ¿k xf] .

16. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
4. Transferability of shares x:tfGt/0fLo z]o/M
In a public company, the shares of a member can easily be transferred without the consent of other
members. As shares are freely transferable, a shareholder can convert his/her holding into cash or
others. This facility encourages the general public for investment in a company. ;fj{hlgs sDkgLdf
;b:osf] ;]o/ ;lhn};Fu cGo ;b:ox¿sf] :jLs[lt lagf :yfgfGt/0f x'g ;Sb5 . o;sf] ;]o/ :jtGq ¿kfGt/0f
of]Uo x'G5 . z]o/;b:on] cfˆgf] xf]N8 u/]sf] ;]o/ ;lhNo};+u gub jf cGodf ¿kfGt/0f ug{ ;Sb5 . sDkgLdf
nufgLsf]nfuL cfd hgtfdf o; ;'ljwfn] k|f]T;fxg ub{5 .
5. Democratic management k|hftflGqs Joj:yfkgM
A company management is a democratic in nature. It is managed by elected representatives of its
members, who are called 'Directors' and their group is called "Board of Directors'. Ps sDkgL Joj:yfkg
k|s[lt k|hftflGqs x'G5 . o;sf] ;~rfns ;ldltsf ;b:ox¿ jf lgb]{zsx¿ lgjf{lrt k|ltlglwx¿ x'G5g .
6. Advantages of large scale business 7"nf Joj;fosf] kmfObfM
Since a joint stock company is a large scale organization, it enjoys the advantages of large scale in
every areas of its business. ;+o'Qm :6s sDkgL 7"nf] :t/sf] ;+u7g x'g] ePsf]n] o;n] cfˆgf] Joj;fosf] k|To]s
If]qdf h:t} s/ ;'lawf, hg ljZjf; cflb 7"nf] dfqfsf] kmfObfx¿ kfpFb5 .

17. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
1.5: Company’s Promotors sDkgLsf k|jt{s jf k|a4{sx¿ jf ;+:yfksx¿ M
Company promoters are the people who give birth to a company. Promoters generate the idea
and discover business opportunities. They make detailed investigation about the feasibility of
the business, financial sources and competitors. They prepare necessary document like the
Memorandum of Association, the Article of Association and the prospectus for the
incorporation of the company. The promoters may be anybody such as an entrepreneur, a
professional promoter, government and financial institutions.
d'gfkmfo'Qm Joj;fosf] cj;/sf] klxrfgu/L s:tf] sDkgL vf]Ng] eGg] cjwf/0ffsf] ljrf/ ug]{b]lv lnP/ sDkgLsf]
:yfkgfdf of]ubfg jf sDkgLsf] hGd lbg] JolQmx¿ tyf JolQmx¿sf] ;d"xnfO{ k|a4{s jf ;+:yfks elgG5 .
k|a4{sx¿n] sDkgL vf]Ng] s'/fsf] ljrf/ ub{5g tyf Joj;flos cj;/sf] vf]hL ub{5g . pgLx¿n] Jofj;flos
pko{'Qmtf, ljQLo ;fwg tyf k|lt:kwf{sf] uxg cg';Gwfg ub{5g . pgLx¿sf] sDkgL ;+:yfkgsf] nflu cfjZos
ljleGg k|n]vx¿ h:t}M k|aGwkq, lgodfjnL, ljj/0f kq, cflb tof/ ub{5g / sDkgL vf]Ng] ljrf/nfO{ Jojxf/df
kl/0ft ub{5g . s'g} klg pBdL, k]zfut k|a4{sx¿, ;/sf/ tyf ljQLo ;+:yfx¿dWo] hf] sf]xL klg sDkgLsf]
k|a4{s aGg ;Sb5g .

18. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
The main functions of promoters are as follows k|a4{ssf d'Vo sfo{x¿ lgDgfg';f/ x'G5g M
• To develop the idea of starting a business. Joj;fo z'? ug]{ ljrf/sf] ljsf; ug]{ .
• To investigate and verify the feasibility of the business. Jofj;flos ;DefJotfsf]
cg';Gwfg tyf d"NofÍg jf ?h' ug]{ .
• To select the name and the site of the business. Joj;fosf] gfd tyf :yfgsf] 5gf}6 ug]{ .
• To determine the objectives of the business. Joj;fosf p2]Zox¿sf] lgwf{/0f ug]{ .
• To prepare necessary documents for its registration. sDkgL btf{sf] nflu cfjZos
k|n]vx¿ tof/ ug]{ .
• To make the plan of financial sources. ljQLo of]hgf tof/ ug]{ .

19. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
1.6: Main documents of Company k|a4{sDkgLsf d'Vo sfuhftx¿ jf k|n]vx?M
1. Memorandum of Association ( MOA) k|aGwkqM
Memorandum of Association is the first document in which the main objective and external rules and
regulations of the company will be stated. It is the constitution of a company. The company should
operates as per the terms and conditions mentioned in the MOA. If the company does not operate as
per the MOA, it will be considered as illegal. In case of private limited company, at least , one
promoter and in case of public limited company at least seven promoters have to sign on the MOA.
of] sDkgLsf] d"n lawfg ePsf] n] o;nfO{ sDkgL sf] d'Vo k|n]v elgG5 . o;n] ;+:yfsf] p2]Zo, clwsf/ tyf
aflx/L ljZj;Fusf] ;DaGwnfO{ kl/eflift u/]sf] x'G5 . ;fy}, o;n] sDkgL /xg] 7fpF, ug]{ sfd, cflb klg tf]s]sf]
x'G5 . k|aGwkqsf] 9fFrf leq /x]/ sDkgLn] cfˆgf] sfd ug{'kg]{ x'G5 .

20. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
According to Lord Macmillan, “Memorandum of Association sets out the constitution of the
company. It is, so to speak, the charter of the company and provides the foundation on which the
structure of the company is built. In enables persons who deal with the company to know its
permitted range of activities.”
n8{ Dofsldng sf] egfO{cg';f/ “k|aGw kq sDkgLsf] nflu ;+ljwfg ;/x xf] . of] sDkgLsf] j8fkq -Charter_ xf] / o;n]
sDkgL s;/L v8f x'g] eGg] s'/fsf] hu tof/ ub{5 . o;n] sDkgL;Fu Jojxf/ ug]{ JolQmx¿nfO{ sDkgLsf] sfo{sf] ;Ldfaf/]
hfgsf/L lbG5” .
The main contents of the MOA are as follows k|aGw kqdf lgDg s'/fx¿ pNn]lvt x'G5g M
• The name of the company. sDkgLsf] gfd
• The name of the place where the company’s registered office is situated. sDkgLsf] /lhi68{ sfof{no
/xg] 7fpF / sDkgLn] sf/f]af/ ug]{ :yfg
• The objectives of the company. sDkgLsf] p2]Zo
• The liability clause of shareholders. z]o/ ;b:ox¿sf] bfloTj;DaGwL bkmf
• The amount of capital of the company. sDkgLsf] clws[t k'FhL
• Other necessary particulars. z]o/sf] vl/b tyf x:tfGt/0fdf s'g} aGb]h /x]sf] eP;f] s'/f ;+:yfksx¿n] tTsfn lng
sa'n u/]sf] z]o/ ;+Vof cGo cfjZos s'/fx¿ .

21. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
2. Article of Association (AOA) lgodfjnLM
Article of Association is another important document for establishment of the company. It relates with
the internal rules and regulations of the company. It contains rules, regulations and by laws for the
internal management of the company. Every company has to prepare articles of association along with
other documents for incorporations. Matters related in the Article of Association should not be against
the Memorandum of Association. Any content of Article of Association which disagree with the
Memorandum of Association shall be invalid to the extent of such conflict. It shows the relation
between the company and its member and relation among the members.
sDkgLsf] cfGtl/s Joj:yfkgnfO{ oyf]lrt dfu{lgb]{zg k|bfgug{ tof/ ul/g] k|n]vnfO{ lgodfjnL elgG5 . o;n]
Joj:yfkssf] clwsf/, zlQm tyf st{JonfO{ kl/eflift u/]sf] x'G5 . vf;u/L, sDkgLn] cfˆgf] sfd sf/afxL ;'Jojl:yt
9+Ën] ;+rfng ug{ tyf k|aGwkqdf pNn]lvt p2]Zox¿nfO{ sfo{ ¿kdf kl/0ft ug{ lgodfjnL tof/ ub{5.

22. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
According to the Company Act 2063, the Articles of Association contains the following sDkgL P]g
@)^# sf] bkmf @) -!_ cg';f/ sDkgLsf] lgodfjnLdf lgDg s'/fx¿ pNn]v x'g'kb{5M
• Number of directors and their terms and conditions. ;+rfnsx¿sf] ;+Vof tyf pgLx¿sf] zt{ / cj:yf
• The amount of minimum subscription by directors. ;+rfns x'gsf] nflu lng'kg]{ Go"gtd z]o/ ;+Vof
• Matters relating to the procedure of calling company’s meeting and notice to be given for meeting.
sDkgL ;ef af]nfpg] tl/sf / ;efsf] nflu lbg'kg]{ ;"rgf;DaGwL s'/fx¿
• Director’s remuneration and allowance. ;+rfnsx¿sf] kfl/>lds / eQf;DaGwL Joj:yfx¿
• Rights and duties of the managing directors. k|aGw ;+rfnssf] clwsf/ / st{Jox¿
• Provisions relating to the rules and regulations of internal management. cfGtl/s Joj:yfkg;Fu
;DalGwt lgod sfg'gx¿
• Other necessary particulars. k"jf{lwsf/ z]o/ ;b:ox¿sf] ljz]ifflwsf/ / aGb]hx¿ cGo cfjZos s'/fx¿ .

23. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
3. Prospectus ljj/0fkqM
Prospectus is another major important document of the company. Simply, prospectus is the
brief report of the company. In other words, Prospectus is an invitation to the general public
to participate or purchase the shares of the company. We know that public limited company
will manage the capital from the general public by issuing the shares. The prospectus should
not be signed by the all the directors, but the prospectus which is to be published should be
approved by the concerned department of Government of Nepal.
sDkgLn] cfˆgf z]o/ tyf l8j]Gr/x¿ vl/b ug{ ;j{;fwf/0fnfO{ cfJxfg ub}{ k|sfzg ug]{ k|n]vnfO{
ljj/0fkq elgG5 . csf]{ zAbdf s'g} ;s{'n/, lj1fkg, k|:tfj tyf cGo s'g} k|n]v h;åf/f sDkgLn]
;j{;fwf/0fnfO{ cfkmgf z]o/ tyf l8a]Gr/ dfu jf vl/b ug{ cfJxfg ub{5 eg] To;nfO{ g} ljj/0fkq
elgG5 .

24. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
The important content to be include in the prospectus are as follows
ljj/0fkqdf lgDg ljifoj:t'x? ;dfj]z ul/G5 M
• Main objective of company and Contents of the MOA & AOA. sDkgLsf] k|d'v p2]Zo ;fy} k|jGwkq tyf
lgodfjnLsf d'Vo aFbf
• The qualification of the directors. ;~rfnsx?sf] gfd, 7]ufgf / of]Uotf
• Name of auditor and their remuneration n]vf kl/Ifssf] gfd, kfl/>lds / n]vfkl/If0f k|ltj]bg eP ;f] sf] ljj/0f ;d]t
• Expected dividend to be declared by the company. ck]lIft nfef+zsf] 3f]if0ff
• Details about brokerage, underwriting commission and preliminary expenses. cG8//fO6/ b:t'/
• Capital structure of the company divided into authorized, issued, subscribed and paid up share
capital. k'FhLut ;+/rgf
• Other necessary particulars. o;sf ;fy} cfjZos ljleGg s'/fx?

25. Class 12: Account, Prepared and Presented by Pralhad Sapkota, Pragati SecondarySchool Hetauda – 9, Makawanpur, Nepal
The main objectives of Prospectus are as follows:
 Information about the company to the general public.
 Initiation of interest from the public for investment by purchasing shares.
 Creation of confidence towards company to the general public.
 Make the general public aware about the terms and conditions for purchasing
shares.