What is a Shareholder? – A Simple Guide for Beginners

If you are planning to start a company in Nepal or already run one, you’ve probably heard the term shareholder. But what exactly does it mean, and why is it important for your business?

In this blog, we’ll explain what a shareholder is in simple words, and why understanding shareholders is important when registering, updating, or closing a company in Nepal.

Who is a Shareholder?

A shareholder is a person or organization that owns shares in a company.

When someone invests money in a company by buying its shares, they become a part-owner of that company. In return, they may receive profits (called dividends) and have the right to vote in company decisions.

In Nepal, shareholders play an important role in both Private Limited Companies (Pvt. Ltd.) and Public Limited Companies (Ltd.).

Types of Shareholders

There are mainly two types of shareholders:

1. Individual Shareholders
   • A single person who owns shares.
   • Common in private companies.
2. Institutional Shareholders
   • Organizations like banks, investment firms, or other companies that buy shares.
   • More common in public companies.

Rights of a Shareholder in Nepal

As per the Companies Act of Nepal, shareholders have certain rights:

• Right to vote in general meetings.
• Right to receive dividends if the company declares profits.
• Right to inspect company documents.
• Right to transfer shares (depending on company rules).
• Right to take legal action if their rights are violated.

Responsibilities of a Shareholder

Along with rights, shareholders also have responsibilities:

• Paying for the shares they purchase.
• Following the company’s rules (as stated in the Articles of Association).
• Not misusing confidential company information.

Why Shareholders Matter During Company Registration & Closure

At Company Sewa, we help entrepreneurs register companies in Nepal. Understanding shareholders is a key step in this process.

• When registering a company, you must clearly list all shareholders and their shareholdings.
• During share transfer, all changes must be officially recorded with the Office of Company Registrar (OCR).
• For company closure, shareholder approval is required, and all share-related matters must be settled first.

Need Help With Shareholder Updates or Transfers?

Whether you’re:

• Adding a new shareholder
• Transferring shares to another person
• Removing an existing shareholder

We at CompanySewa can guide you through the legal process smoothly. Our expert team ensures compliance with Nepal’s company laws and handles all paperwork for you.