This is a common situation: a company was registered for a project, startup or future plan, but the business never properly launched. Years later the owner assumes there is nothing to do because there were “no transactions.” That assumption can create unnecessary penalties and cleanup work.
The company still exists
Incorporation creates a legal person. Unless it has been lawfully removed or dissolved, the company should be treated as existing and its compliance position should be reviewed.
Start with a compliance diagnostic
- Which fiscal years have passed since incorporation?
- Was PAN obtained and were required tax returns filed?
- Was the company VAT registered at any time?
- Were bank accounts opened or transactions made?
- Were accounting records and annual financial statements prepared?
- Were audits completed?
- Were required company-law filings submitted to OCR?
- Did the company have employees, rent, professional fees or founder-paid expenses even without revenue?
“Zero sales” is not always “zero transactions”
Founders often paid registration costs, rent, software, professional fees or deposits personally. A company may therefore have accounting entries even when it earned no revenue. These should be documented rather than ignored.
How to regularize an old company
Build the accounting records year by year, reconcile tax registrations and filings, complete outstanding financial statements/audits where required, and then address OCR submissions. The exact sequence depends on the company’s history.
Then decide: maintain or exit
Once the backlog is understood, decide whether the company has future value. If not, obtain advice on the available legal route for closure rather than simply abandoning it.
Frequently asked questions
If my company had zero sales, can I ignore annual compliance?
No. The absence of sales does not by itself cancel the company’s legal existence or automatically remove all company and tax filing obligations.
Should I keep the company or close it?
That is a commercial and compliance decision. Compare the future usefulness of the company with the cost and work required to regularize and maintain it, and obtain advice on the legally available closure route if you no longer need it.
Official sources & further reading
- Office of Company Registrar — Activities Required After Incorporation
- Nepal Law Commission — Companies Act, 2063
- Inland Revenue Department — FAQ
Rules, thresholds, rates and filing processes can change. Check the current law and official portal before relying on an older guide.
Need help applying this to your business?
General guidance is useful for understanding the issue. Your actual records, registrations and circumstances may require a different treatment.