Firms ignore OCR call to go online
Kathmandu, March 25
More than half of the companies registered with the Office of Company Registrar (OCR) are not complying with the mandatory rule of entering their details in the online system of OCR. This is because the advancements made in facilitating traders to set up their business have not kept pace with necessary reforms to facilitate firms wanting to shut shop.
According to traders, a huge chunk of companies registered in OCR are currently non-operational and want to exit. However, as the exit policy of the government is full of hassles and exit charges are much
higher, majority of firms are unwilling to visit OCR office to complete their exit procedures.
The database maintained by OCR shows 76,632 firms or around 54 per cent of the total 166,782 companies registered with the OCR have not taken their user ID from the registrar’s office.
“The government just brought a provision in the Company Act allowing defunct companies to exit by paying either 0.5 per cent of their paid-up capital or 0.5 per cent of the government taxes, whichever is less. Once this provision is enforced, firms will certainly visit OCR to update information about their companies,” said Dinesh Shrestha, vice-president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).
Introduced in 2013, the online system is aimed at facilitating businesses and eradicating hassles of making rounds of the OCR office for every small purpose. Upon registering in the system, companies can complete all administrative works via online facility. To avail this facility, they only have to make a one-time visit to the OCR office to pay the industry registration charges, register digital signature and take the online user ID developed by OCR for individual firms.
Consequently, the country’s ranking in ‘ease of starting a business’ category of World Bank’s Doing Business (DB) 2014 had improved to 97 out of 189 economies, against its standing at 103 in DB 2013.
While all new companies registered after the online system was introduced
are using the system for their administrative works, companies registered before 2013 are yet to adopt the system, informed an OCR official.
Company Registrar Prem Kumar Shrestha informed that the OCR has already upgraded to the digital
system and discarded all manual data.
Urging companies that have not gone digital till date to complete the necessary procedures at the earliest, Shrestha said, “Apart from being safer, digital documentation also ensures accountability and increases efficiency at work.”
Moreover, by adopting the new system, companies themselves can update their annual report, change in share structure and shareholders of the company, change in company’s name and location, among others by logging into their user ID in the OCR website.
The OCR has been lenient towards the errant companies so far as ‘bringing all companies under digital system is a bigger project and takes time’. However, the OCR plans to take action against the companies that continue to ignore the calls to take user ID from OCR, according to an official privy to the matter.
Requesting anonymity, as he was not authorised to speak to the media, the OCR official informed the regulator is mulling over the penalties to be slapped on such errant firms.
However, Shrestha clarified that the private sector has welcomed the online system introduced by OCR. “Of the total firms which are yet to go online, more than 50 per cent are currently defunct. Once the new exit provisions are enforced, firms would be encouraged to visit OCR, update themselves with government offices and adopt online registration system,” he said, adding, “Some companies may be encouraged to revive their companies if the government introduced a provision whereby defunct firms can resume their operation by paying 0.5 per cent of the company’s paid-up capital.”