Annual General Meeting (AGM) Law in Nepal

Under Section 67 of the Companies Act:

• First AGM — within one year from commencement of business
• Subsequent AGMs — every year within six months after the end of the fiscal year
• Gap between AGMs — no more than 15 months between two consecutive AGMs

For companies following the Nepali fiscal year (Shrawan to Ashar), the AGM must occur before Poush of the following year. Failure to hold the AGM within this timeline plus an additional 3-month grace period may result in the Office of Company Registrar (OCR) directing the company to hold one.

A minimum 21-day written notice must be sent to all shareholders before the AGM (Section 68). The notice must include the date, time, venue, and complete agenda. For public companies, the notice must also be published in at least one national daily newspaper. Companies must make financial statements, auditor's report, and director's report available for shareholder inspection at the registered office at least 21 days before the meeting (Section 84).

Under Section 73 of the Companies Act:

• Public company — at least 3 shareholders present (in person or by proxy) representing not less than 25% of total voting rights, each holding more than 50% of total shares issued
• Private company — at least 2 shareholders or one-fourth of total shareholders (whichever is higher), or as specified in the Articles of Association

A public company may specify a higher quorum in its Articles but cannot set it lower than the statutory minimum.

Mandatory AGM agenda items under Section 69 include:

• Approval of audited financial statements (balance sheet, profit and loss, cash flow)
• Director's report and auditor's report
• Election or re-election of directors
• Appointment of auditors and fixing their remuneration
• Declaration of dividends
• Any special business specified in the notice

For public companies, additional SEBON-mandated disclosures may apply.

An AGM is a mandatory annual meeting with a fixed schedule and standard agenda (financial statements, directors, auditors). An Extraordinary General Meeting (EGM) is convened as needed between AGMs to address urgent or exceptional matters — such as removal of a director, amendment of the Articles of Association, major transactions, or any business that cannot wait until the next AGM. Both require 21-day notice, quorum compliance, and proper minutes.

An EGM can be called by:

• The Board of Directors — on its own initiative
• Shareholders — holding at least 10% of total shares can requisition the board to call an EGM
• The Court — if the board fails to call an EGM after shareholder requisition, shareholders may apply to the court for an order

The same 21-day notice and quorum requirements apply to EGMs.

Voting can be conducted by show of hands or by poll, depending on the company's Articles of Association and the nature of the resolution. The general principle is one share, one vote unless the Articles specify otherwise. Ordinary resolutions require a simple majority (50%+1). Special resolutions require 75% majority for significant decisions (e.g., amending Articles, non-cash share issuance). Shareholders can appoint proxies to vote on their behalf. In case of a tie, the chairperson has a casting vote.

Under Section 67 of the Companies Act, a public company must hold its AGM in the district where its registered office is located. However, the Board of Directors may decide to hold the meeting at a convenient place in an adjoining district if it benefits the majority of shareholders. Virtual AGMs are not explicitly provided for under the Companies Act, though some flexibility has been allowed subject to regulatory approval in exceptional circumstances.

Under Section 75 of the Companies Act, minutes of the AGM must be prepared and signed by the chairperson within 30 days of the meeting. Minutes must record all discussions, decisions, resolutions passed, and voting results. The minutes serve as the official legal record of the meeting and can be used as evidence in any dispute. Companies must maintain a minutes book at the registered office.

Within 30 days of the AGM, the company must submit to the Office of Company Registrar (OCR):

• Return detailing the number of shareholders in attendance
• Copy of audited annual financial statements
• Director's report
• Auditor's report
• Copies of all resolutions adopted at the meeting

Failure to submit returns within the deadline results in fines imposed by OCR.

The company must submit a report to OCR 21 days before the AGM containing: details of directors, managing director, auditor, executive chief, and manager along with remuneration paid; amounts receivable/payable and details of pending lawsuits; management expenditure statement for the fiscal year; number of unclaimed dividends; and other necessary matters prescribed by OCR.

Yes. Under recent amendments to the Companies Act, private companies are also required to hold AGMs annually unless their Articles of Association specify otherwise. Private companies with fewer than 50 members may follow simplified procedures. The quorum for private companies is set by the Articles of Association — if not specified, at least 2 shareholders or one-fourth of total shareholders must be present.

If a company fails to hold an AGM within the required timeline (six months after fiscal year-end) plus the 3-month grace period, the Office of Company Registrar may direct the company to hold the AGM. Continued failure can result in fines, restrictions on the company's operations, and potential action against directors. For listed companies, SEBON may impose additional penalties and restrict trading of the company's securities.

A lawyer can assist with: drafting AGM notices and agenda, ensuring quorum and procedural compliance, preparing resolutions (ordinary and special), advising on shareholder voting rights, drafting and reviewing minutes, filing returns with OCR and SEBON, handling EGM requisitions, and resolving shareholder disputes arising from meetings. Contact Nepal Divorce Services at +977 9841114443.