Major Rights of Shareholders In Nepal


Shareholders or Investors are considered to be the real owners of a company. They are the source of capital required to mobilize via capital market. They benefit, through dividends and capital appreciation, and wealth maximum when the company performs well. On the other hand, they equally carry the risk of losing part or full portion of their investment if the company performs badly and goes for liquidation. As an owner of the company, a shareholder has some fundamental rights along with which s/he should perform his/her role responsibly.

Major Rights of Shareholders entrusted by Securities Related Act, 2006 and Company Act, 2006 are:

  • To participate in the public issue of securities,
  • To receive the shares on allotment or purchase within the stipulated time and to be refunded his money back within the given time in case of not allotment.
  • To receive dividends in due time once approved in general meetings.
  • To receive corporate benefits like rights, bonus, etc. once approved.
  • To receive offer in case of takeover, delisting or buyback though buyback is not allowed in Nepal.
  • To receive the residual proceeds in case of winding up.

Major Rights of Shareholders

Participation and Vote in AGM

To participate and vote in Annual general meetings (AGM) and enjoy voting right. [Be entitled to attend the general meeting and cast votes at the rate of one vote for each share held by him]


Subject to Sub-section (1) or (2) , where a shareholder who is entitled to vote is not able to personally attend the meeting, he/she may appoint a proxy to vote in his/her stead, by an instrument of proxy executed in the prescribed format and signed by him/her and the proxy so appointed shall be entitled to attend or vote in the meeting.

Appointment of Proxy

Appoint another person as his/her proxy to attend the general meeting and vote instead of him/herself.

Signing in the Minutes

In the case of a company which has no company secretary, the minutes shall be signed by the Chairperson of the meeting concerned and by a representative of shareholders appointed by a majority of the general meeting.

Put a Matter for Discussion and Decision

If the shareholder or shareholders representing at least five per cent of the total number of votes shall so desire, s/he/they may, by submitting an application to the directors prior the issue of a notice under Subsection (2) of Section 67, cause any matter to be presented at the annual general meeting for discussion and decision.

Call of AGM

At least twenty one days prior to the holding of the annual general meeting, every public company shall make arrangement so that the shareholders can inspect and obtain copies of the annual financial statement, directors’ report and auditors’ report as referred to in Section 84 and publish a notice in a national daily newspapers for information thereof. Information of the statements and reports as referred to in Sub-section (3) may also be disseminated through electronic communication media, as per necessity.

Right to Get Annual Financial Statement

If any shareholder makes a request for a copy of the annual financial statement, directors’ report and auditor’s report as referred to in Sub-section (3), the company shall provide a copy of such reports or statements to such shareholder

Agenda to be Passed During AGM

Except as otherwise provided in the Act, matters of distribution of dividends to shareholders, appointment of directors and their remuneration, appointment of auditor and his remuneration of such other items as required by this Act or the articles of association to be decided by the annual general meeting of the company can be presented at the decided by the annual general meeting of the company can be presented at and decided by that meeting. Provided, however, that on the rate of dividends to be distributed to the shareholders shall be made in a manner to exceed the rate of such dividends fixed by the board of directors.

Extra General Meeting

If the shareholders holding at least ten percent shares of the paid–up capital of a company or at least twenty five per cent shareholders of the total number of shareholders make an application, setting out the reasons therefore, to the registered office of the company for calling an extra-ordinary general meeting of the company. If the board of directors does not call the extraordinary general meeting within thirty days from the date on which an application is made pursuant to Sub-section (3), the concerned shareholders may make a petition to the Office setting out the matter; and if a such petition’s made, the Office may cause to call such meeting.

Abstract Financial Report

Provisions on sending abstract of financial reports to shareholders:

Notwithstanding anything contained elsewhere in the Act, a company listed in the stock exchange shall not be required to send the annual financial statement and director’s report to its shareholders or debenture-holders Provided, however, that an abstract of financial statement prepared pursuant to Sub-sections (2) and (3) shall be sent to every shareholder along with the notice of annual general meeting.

Source: SEBON

You May Also Like:

40 Commonly Used Share Market Terms

Basic Requirements To Start Trading In The Stock Market Of Nepal


Investopaper is a financial website which provides news, articles, data, and reports related to business, finance and economics.

Leave a Reply

Your email address will not be published.

error: Content is protected !!