Proactax

Proactax updated their phone number.

#2020 has been an unprecedented year for everyone around the globe albeit with some silver linings and completely transforming some aspects of our lives.

Despite the difficult times, we have become stronger and moving towards sustainability from survival. We thank everyone who has directly or indirectly contributed to our initiation and the growth. To many more years ahead!!!!

Here is wishing you a better #2021

Wishing you health, happiness and prosperity.

Happy New Year 2021!!

Wishing you all a very happy Dipawali and Chhait!!

May This Festival Of Lights Brighten Your Life and Bring Happiness , Joy And Prosperity For You And Your Family!!!

Stay safe and spread happiness!!!

देश विदेशमा रहनु भएका सम्पूर्णलाई बडा दशैँ २०७७ को हार्दिक मंगलमय शुभकामना तथा सुस्वास्थ्यको कामना !!!

Wishing everyone across the globe a very Happy Dashain!! May this dashain make you happier, healthier and more prosperous!

For Better, Easier, Smarter and Timely Corporate Legal Solutions Lex Advise is always there.

Thank you for your support!

♻Expired products: Can they be relabeled and sold again?

📚What does the law say?

⁉Over the last few days, the news about the changing the labels on the wrappers of expired chocolates and supplying them back to the market has spread like wildfire and a well known conglomerate like Vishal Group , along with a few other entities’ were alleged to have been involved.

💡Shedding the light on the organized big scale operation of selling food products past their expiry dates by relabeling them, the news raised a lot of concerns over its impact on human health.

🛒The retailers/wholesalers are required to return the expired products to the manufacturers which are to be eventually destroyed.

Advocate Mamata Paudel analyzes the prevailing legal provisions for your easy understanding of the issue.

Expired Goods: Can they be relabeled and sold again? What does the law say? Over the last few days, the news about the changing the labels on the wrappers of expired chocolates and supplying them back to the market has spread like wildfire and a well known conglomerate like Vishal Group, along with a few other entities’ were alleged to have been involved. Shedding the lig...

📢 MAKING YOUR VOICE HEARD!

The Ministry of Industry, Commerce and Supplies recently issued a notice seeking suggestions and commentaries regarding any drawbacks on the existing laws or the need to amend the existing provisions in order to simplify the FDI related processes in Nepal.

We, at Lex Advise in collaboration with Lex Advisers, one of the leading law firms on Nepal, are conducting a survey to present a detailed report, in line with the feedback and suggestions received, to the Ministry.

It's high time we stop complaining about the policies and start reforming them. So, fill up this survey and play your part in framing the Policy that Concerns You and Your Investment!

https://bit.ly/34AyBfi

⚠Compliance Alert: Annual Filings by Industries⁉

✔Section 13 of the Industrial Enterprises’ Act, 2020 (hereinafter referred to as the “Act”) mandates registered industries, after the commencement of commercial production or transaction, to submit the prescribed details to the authority of industry registration within 6 months from the end of each fiscal year. 🕓🕓

✔Additionally, in the event of failure to comply with this provision, the Act legislates the authority to levy fines for such industries as provisioned under section 43(5) of the Act. The fine amount is stipulated differently for the different types of industries, providing Rs. 1000 for micro entrepreneurship, Rs. 5000 for cottage and small industries, Rs. 10,000 for a medium industry and a large sum of Rs. 25,000 for large industries.

For details, please refer to the following link.

Compliance Alert: Annual Filings at the Department of Industries Section 13 of the Industrial Enterprises’ Act, 2020 (hereinafter referred to as the “Act”) mandates registered industries, after the commencement of commercial production or transaction, to submit the prescribed details to the authority of industry registration within 6 months from the end of ...

or in Nepal

In 2017, alleging Pragyan Securities for involving in malpractice that resulted in insider dealing, SEBON barred Pragyan Securities from stock trading after the brokerage was found leaking confidential information to its clients.

Company was alleged of sharing the information about securities that was not yet made public. As per sec 101 of Securities Act, 2063, Pragyan securities was made liable to pay RS 75,000 fine.

This is just one of the instances of insider trading: highly sensitive yet least discussed topic in Nepal.

So what does the law provide to protect the investors at large and strengthen the capital market of Nepal?

Rakshya Khanal has put her efforts to analyse the basic legal provisions and also some actions taken with respect to insider trading.

What do you think should SEBON focus on while finalizing the Insider Trading Regulation?

Follow Lex Advise for similar legal analysis esp. in the are of corporate law in Nepal. You may also submit your legal analysis to us or suggest relevant topics at [email protected]

Insider Trading: A legal perspective Black’s Law dictionary defines insider trading also known as insider dealing (the terms are used often interchangeably throughout the article) as “the use of material nonpublic information in trading of the shares of the company by a corporate insider or any other person who owes a fiduciary dut...

Companies’ Act, 2063 and Company Directives 2072 lays down the required legislation to be abided by in carrying out voluntary liquidation of a company.

Under section 126 of the Companies’ Act and section 64 of the Directives, any company may undergo voluntary liquidation under following circumstances:

a. If a company is able to fully pay off its debts or other liabilities,

b. If there exists no situation where an application for review of insolvency is pending, or where the company would be subject to insolvency proceedings,

c. If the directors of the company have after due inquiry made a declaration stating that the company is able to pay off all of its debts and other liabilities, or that the debts and liabilities to be paid on behalf of such company can be paid up or fully settled in any other process within one year from the date of the adoption of the resolution to liquidate the company.

d. If the written declaration made by the directors was presented in the Special General Meeting (SGM) called to discuss on the liquidation matter, or it was made at the time of GM called to discuss matters on liquidating the company.

More details in the article.

Huge thanks to Advocate Mamata Paudel for the information.



https://lexadvise.com/closing-your-business-legal-aspects-of-voluntary-liquidation-of-companies-in-nepal/

Closing your Business: Legal Aspects of Voluntary Liquidation of Companies in Nepal In the plainest sense, liquidation refers to liquidating all the assets of the company, thus bringing the business to an end. Voluntary liquidation is when a company decides to end its existence deliberately as opposed to when the company has become insolvent.

Eid Mubarak to all. May the almighty bless us in this crisis. 🌙

The National Planning Commission, Government of Nepal, issued a notice on 11 May 2020 requesting proposals from innovative startups in need of seed capital to start their business. As per the notice, any person or institution who is an inventor, industrialist or entrepreneur with innovative knowledge, skill and capacity may apply for the grant.

Guidelines and Procedures provide that selected applicants shall be provided with a grant of a maximum of NPR 5 million or 50% of their project cost; whichever is less; and the number of projects to be awarded shall be as decided by the Committee.

The article by Shreejala Prajapati details:
- Required qualifications for the applicants/ project.
- How can one apply.
- The terms and conditions.
- How the selection will be made.
- How much is the grant worth.
- How will the grant be released.
- Confiscation of Grants.
- and compliance requirements after grant approval/ receipt of grants.

Innovative Startup Capital Grant Scheme by Government of Nepal The National Planning Commission, Government of Nepal, issued a notice on 29 Baisakh, 2076 (11 May 2020) requesting proposals (“RFP”) from innovative startups in need of initial capital (seed capital) to start their business. The RFP was issued as per the Innovative Start-up Capital Grant Proced...

The National Planning Commission has published this notice for to apply for initial capital assistance/grant capital) and has required to make an application online.

We will post about the criteria and other evaluation mechanism shortly.

But to bring it to your attention, the site where the application has to be submitted did not allow registration till early morning.

It showed some error and now when you try to apply, it shows that the email has been already registered. That means even though it showed error while submitting the registration form, the system has accepted the registration.

However, while trying to login, it says confirm your email but it does not specify how to do that. Generally, an email with link for verification is sent but no such email has been received.

Basically, the Government should first develop an system. It is not that Nepal does not have the or resources but whenever something is related to government, why does it always poor in terms of quality.

They are talking about providing NPR 5 lakh to 50 lakh in , but it would be better if they could utilize NPR 5 lakh to build a solid system.

This is a great initiative and hence, we urge for effective implementation.

सम्पूर्ण न्यायका पक्षधर, कानूनका विद्यार्थी र न्यायप्रेमी जन-समुदायमा ६९औं कानून दिवसको हादिेक शुभकामना ।

Happy 69th law day to all.

On 21st Baisakh 2077, Hotel Association Nepal announced that they will be shutting down their businesses for the next 6 months and will pay their employees just 12.5% of their basic salary. Employees who do not accept this offer were threatened to be fired under section 145 of the Labor Act.

When businesses decide to close down temporarily while retaining their employees, Section 39 of Labor Act, 2074 mandates businesses to pay 50% of their salary.

Many employers and hoteliers mark the basic salary at NPR 8,455 (the government declared minimum basic salary) and classify the rest of the payments as various allowances to reduce employer’s contributions toward employee’s benefits such as provident fund, gratuity, insurances etc. In this case, employees will only be provided with 12.5% of NPR 8,455.

The only thing standing against the implementation of this decision is its acceptance by the trade unions or the concerned employees.

If the employees were to be fired under Section 145 of the Labor Act, they will be entitled to one month’s basic salary for every year of employment. However the likeness of mass unemployment after this pandemic is over may nudge employees towards accepting this offer to keep their jobs.

Huge thanks to Mamata Paudel for her insights!



https://lexadvise.com/an-analysis-of-hotel-association-nepals-decision-to-pay-only-12-5-of-the-basic-salary-to-the-employees-for-the-next-6-months/

An analysis of Hotel Association Nepal’s decision to pay only 12.5% of the basic salary to Employees for the next 6 Months Hotel Association Nepal (“HAN”) on 21 Baisakh 2077 (3rd May 2020) at the presence of its office bearers, former presidents and representatives of its member hotels including all major hotels like Aloft, Radisson, Marriott, Annapurna, Malla, Shangrila, Himalaya among others resolved to shut down ...

What does law in Nepal say about Doctor-Patient confidentiality?

Section 14 of the Public Health Service Act, 2075(2018) states that while providing health service, information including health condition of the service recipient, diagnosis or treatment obtained by him or her shall be kept confidential. It should not be published until and unless the service recipient gives written consent to publish such information or if any information is to be published in accordance with the order of the court or prevailing law or if it appears to have serious impact in public health if information is not published.

The person not maintaining confidentiality required by Section 14 of this Act is liable for fine from twenty-five thousand rupees up to fifty thousand rupees, pursuant to Section 53(b) of the Act.

More details in the article.

Huge thanks to Sandhya Tiwari for her valuable insights.

https://lexadvise.com/doctor-patient-confidentiality-laws-in-nepal/

Doctor-Patient Confidentiality Laws in Nepal Legal Provision Governing Data Privacy When Doctors Use Applications Like Whatsapp, Viber to Share Patients’ Information

has increased the challenges faced by the startups. In today’s Kantipur, Kailash Panday founder of LexpertEase and Lex Advise speaks about the challenges faced by startups in Nepal due to lockdown amidst Covid19 and what the government should do to instill confidence in business community in such unprecedented times.



https://ekantipur.com/business/2020/04/25/158777928372953964.html?author=1

लकडाउनमा टिक्ने उपाय खोज्दै स्टार्टअप उपत्यकाका विभिन्न रेस्टुरेन्टका परिकार घरघरमा पुर्‍याउन सेवा दिने फुडमान्डुको व्यापार लकडाउनयता शून्य छ । रेस....

Latest Notice issued by Nepal Rastra Bank in response to Covid-19 has directed banks and financial institutions to reduce interest rate on bank loans by 2 %.

NRB has also directed banks and financial institutions to provide up to 10% additional current capital loan.

The payment deadline of monthly or quarterly installment to be recovered in Baisakh and Jestha has been extended to Ashad 2077.

The payment of principal and interest of every short term current capital loan to be paid during this lockdown period can be extended up to 60 days.

Huge thanks to Rejina Garu for her analysis.



For more details:
https://lexadvise.com/covid-19-relief-announced-by-nepal-rastra-bank/

Covid-19 relief announced by Nepal Rastra Bank Nepal Rastra Bank (NRB) being the central bank of Nepal has its role in effective supervision of banking and financial system. The situation of lockdown caused by the global COVID-19 pandemic has raised serious concern over the national as well as global economy and financial system. In regard to ea...

Since the enactment of Electronic Transactions Act, a number of people have been arrested, detained and fined on the issues of cyber crime. Majority of those arrests under ETA has been pursuant to section 47.

Section 47 prohibits publishing any materials in the electronic media that are contrary to public morality or decent behavior or which may spread hate or jealousy against anyone or which may jeopardize the harmonious relations existing between people of various castes, tribes and communities.

The vagueness in the words used in Section 47 of ETA such as “morality”, “decent behavior” has been used time and again to arrest journalists, comedians or even common people or former bureaucrats who have published something which are even slightly offensive to the government. It has also been used to discourage political commentaries and satirical humor.

Section 47 of the Electronic Transaction Act of Nepal is vague and widely misinterpreted, and used in large cases to shut down the opposition voices.

Ms. Sandhya Tiwari analyzes how this is setting a wrong trend by gagging freedom of expression.

For more details:


https://lexadvise.com/when-cybercrime-laws-gag-freedom-of-expression-are-we-setting-a-wrong-trend/

When “cybercrime” laws gag freedom of expression: are we setting a wrong trend? The freedom of speech and expression is a fundamental right of people, protected by the Nepalese constitution through its Article 17. However, an unwanted expression through the electronic media, here in Nepal can lead to troublesome situations.

Question: A website collects various private information like name, educational experience, professional background, contact informations etc. of various professionals e.g. doctors, lawyers etc. from their personal sites or their professional bodies and displays those information in the website. Is such collection and display of private/personal information illegal? What are possible legal implications?

Answer: The Constitution of Nepal has secured the right to privacy of citizens as one of their fundamental rights through Privacy Act, 2018. However, Section 34 provides an exception to the privacy right of a person who is a public figure, known publicly or who may be of public interest or concern. Publishing or transmitting their opinions or thoughts that they had publicly expressed earlier, or their audio-visuals and pictures captured in a publicly organized program, or that are available in public domain, shall not be construed to infringe their privacy right.

Privacy Act shall not identify publication of the details disclosing identity including the educational certificate of such person that are in public domain or public knowledge as an offence.

Huge thanks to for her valuable insights!


https://lexadvise.com/data-privacy-use-of-private-information-available-in-public-domain/

Data Privacy: Use of private information available in public domain Question: A website collects various private information like name, educational experience, professional background, contact informations etc. of various professionals e.g. doctors, lawyers etc. from their personal sites or their professional bodies (publicly displayed information in other forums) a...

Do startups/entrepreneurs soliciting investment through social media posts need approval or authorization from the Securities Board of Nepal?

Generally speaking asking for investment through a social media post would not qualify as a “public offer”, provided you take care of certain aspects.

In the context of asking for investment in social media, it can be acceptable if you create a private platform between the company and the recipients. Provided that you confine your audiences in social media while soliciting investment through settings provided for targeted audiences of your post and hence, ensure that your post is not sent to the public at large, it would rather refer to issuing securities privately. Since you make certain of the audiences who would see your post asking for interest in investment, you do not breach the prohibition. Hence, it would not be a problem for private startups to ask for investment in social media if you ensure the same since Securities Act, 2063 does not regulate private limited companies.

Huge thanks to Regina Garu for her detailed analysis.

For more information:


https://lexadvise.com/startups-entrepreneurs-soliciting-investment-through-social-media-posts-a-legal-perspective/

Startups/entrepreneurs soliciting investment through social media posts – A legal Perspective Social media has evolved to be a way of our life and it is almost impossible to stay away from it. While everyone shares a bit of their life through facebook posts, tweets or instagram photos or show their creative musings in Tiktok, it is inevitable that startup founders shy away from these platfor...

Here is a compilation of our Covid 19 related legal updates and insights for you general reference purpose which we have created with the help from Lex Advisers team.

Thank you Shreejala Prajapati, Sandhya Tiwari, Rejina Garu, Mahendra Chakatu, Jelina Maharjan and Mamata Poudel for sharing these insights.

If you want us to cover any specific topics or legal issues, please let us know. You may submit your feedback, suggestion, queries, legal articles and insights at [email protected]

Please note the contents therein do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such. If you need legal advice, please contact an attorney directly.

Covid-19 Updates

Meetings are the first and primary start to corporate governance. But are meetings without physical presence possible; or more importantly allowed under the law?

The rules regarding meetings of the board of directors (“BoD”) of private companies shall be as provided for in their articles of association and or any other agreements between the shareholders of the company. If such is not provided for in those documents, then one will have to refer to Section 97 of the Company Act, 2007 (“Company Act”) that generally provides for all companies and specifically for the public companies; which does not provide for “where” meetings should be held. So, the place of meeting of BoD could be anywhere like the registered address of the company, restaurant or more virtual addresses pleasant for times like these, such as zoom, hangouts, skype among others. The more important thing is to follow the right procedures for conducting and recording the decisions of the meeting.

But what about General Meetings?
More details in the article.

Huge thanks to Shreejala Prajapati for her valuable insights!

https://lexadvise.com/covid-19-business-continuity-corporate-governance-in-the-time-of-crisis/

Covid 19 Business Continuity: Corporate Governance in the time of crisis It has been just over a month now since the regular businesses have been disrupted by the government imposed lockdown to fight the spread of Covid 19. In these tough and uncalled times (though not unprecedented: we have been through harsher lockdowns, strikes and curfews, natural disasters, the 2015...

March 7, 2020: Data breach in Foodmandu results in 50,000 user details being leaked.

April 2, 2020: Kathmandu Press's site was remotely accessed and an article critical of the Government was removed.

April 8, 2020: Vianet's data breached and customer details of 170,000 users were leaked.

April 10, 2020: Prabhu Bank's data breached and details of 400 customers were leaked.

The right to privacy of every person regarding their residence, property, document, data, correspondence and matters relating to their character is a constitutionally guaranteed fundamental right under Article 28 of the Constitution of Nepal, further affirmed by the Privacy Act, 2018 (“Privacy Act”).

Section 25 of Privacy Act notes down the responsibility to protect the data collected, upon the public body or corporate bodies that have stored or controlled the data under their responsibility.

So what are the possible repercussions?

For more details follow the link:

Huge thanks to Shreejala Prajapati for her in-depth insights!



https://lexadvise.com/what-does-the-law-provide-for-security-of-your-private-data-that-you-entrust-to-various-service-providers/

What does the law provide for security of your private data that you entrust to various service providers? On the night of March 7, 2020, Foodmandu, an online food delivery platform, suffered a security breach with over 50K user records stolen. Foodmandu issued a statement regarding the breach on 8th March 2020 and notified its customers that it suffered a data breach and that it is committed to protecti...

While loss of jobs due to the Covid-19 pandemic is an unavoidable reality, there is a due process to be followed. For example, Labor Act, 2017 mandates employers to provide a one day prior notice to employees who have served for up to four weeks, seven days prior notice to employees who have served from four weeks to one year and a month’s prior’s notice to employees who have served for more than a year. If notice has not been served properly, that amounts to wrongful termination.

Similarly, Section 145 of Labor Act mandates compensation with an amount equal to one month of basic salary multiplied by the number of years he/she has worked with the employer.

If due process has not been followed, employees will be entitled to renumeration and benefits and in some cases reinstatement.

For more details:
https://lnkd.in/fkchska

Huge thanks to Advocate Mahendra Chakatu for his valuable insight.

Employee Rights : What are your Options as an Employee if you lost your job amidst Covid-19 Pandemic? COVID-19 pandemic has triggered a shutdown of economic activities across the globe. One among the various sectors affected deeply by the COVID-19 pandemic is the labor market. A lot of workers are being laid off permanently from their work owing to the COVID-19 pandemic. Lots of these layoffs are il...

On 10 April 2020, the Supreme Court of Nepal, issued directives to be observed by the courts to ensure undisrupted and continued dispensation of justice amidst the lockdown. This included provisions for pleading through video conferencing in consonance with the social distancing guidelines of the government of Nepal.

This is a very pragmatic approach by the Supreme Court, however, lawyers still await further directives regarding the procedure and mechanism for the realization of the decision.

In the meantime Jelina Maharjan has looked into how courts in countries like Australia, Singapore, UK, India and Malaysia have already implemented social distancing guidelines and the possible challenges as well as opportunities for courts in Nepal moving online.

https://lnkd.in/fyGgAfp

Online courts and the Future of Justice: Are courts in Nepal moving online? Continuous lockdown imposed throughout the nation to control haphazard spread of COVID 19 has exposed courts to real challenges in delivering justice effectively. On 10 April 2020, the Supreme Court of Nepal, realizing urgency in justice delivery and current necessity of physical distancing, issued....

Lex Talk successfully conducted the first (zoom discussion) today where Abhinav Sharma and Kailash Panday discussed on various aspects of their legal and provided their valuable on choosing to study law, their law school experience, starting off and finally venturing into their own .

While the topic of discussion was "Litigation as a career" but the discussion covers wide range of issues related to corporate law and advisory practice. You may watch the of the discussion in YouTube and the link is shared in comment section.

Sumit Kansal also added some from his experience.

The next on the series is "LLM & Career Prospects Abroad" where we have Subrata Lamsal as our speaker. Subrata is an lawyer. She studied oil and gas, electricity, and international law on 3 different continents (Elisabeth Haub School of Law at Pace University, University of Groningen), and has worked in electricity and power and general setting on these continents including at Eversheds Sutherland.

The discussion will be hosted by Shreejala Prajapati, a young and dynamic corporate based in Kathmandu, who is a senior associate at Lex Advisers.

Please comment "Interested" and follow this page for further updates.

Can the police arrest you if you do not comply with the lockdown directed by the Government of Nepal?

Section 2 of Infectious Disease Act, 1964 (2020) (“Act”) states that the government may issue necessary orders to the general public for the control or eradication of the contagious diseases.

Any person violating the orders issued pursuant to the Act may be sanctioned under Section 3(1) of the Act with a fine of up to NPR 100.00, or imprisonment of up to one month, or both for violating the Act.

More details in the article.

Huge thanks to Garu for her valuable insight!


https://lexadvise.com/violation-of-lockdown-and-legal-provisions/

Violation of Lockdown and Legal Provisions Nepal has been in lockdown since 23 March 2020. The Government of Nepal has been extending lockdown thereafter with the increase of Covid 19 infection cases; the current extension applicable up to 27 April 2020. The Government of Nepal has ordered the lockdown following the power vested upon it to d...

Did you know that Nepali citizens, firms and corporate bodies can directly borrow up to USD 1 Million from abroad with approval from the Nepal Rastra Bank?

Nepal Rastra Bank (“NRB”), the central bank, issued a notice on 12 March 2020 (“Amendment”) allowing Nepali citizens, firms and corporate bodies to obtain loans up to USD 1,000,000 or INR 100,000,000 (from India), from one’s relatives residing abroad, other personnel, non-residential Nepalese, organizations and corporate bodies, with prior approval of NRB. The purpose of such loan shall be to conduct one’s business or expand one’s business. Earlier, the limit was USD 500,000 or INR 50,000,000 in case of India. The amendment notice changed the interest rate from Nil to Nil or a maximum of 1 year LIBOR +0.5% and repayment timeline from 5 years to 3 years. Restriction on obtaining such loan in the real estate sector and securities or in any such sector prohibited by the prevailing laws of Nepal is continued as per the previous Notice.

Huge thanks to Mamata Paudel and Shreejala Prajapati for their valuable insight.

For more details:



https://lexadvise.com/foreign-loan-circular/

Foreign Loan Circular Nepal Rastra Bank (“NRB”), the central bank, issued a notice on 12 March 2020 (“Amendment”) amending point no. b (ii) of its earlier notice included in its Unified Circulars, 2020 (2076) (“Unified Circulars”), Notice No. 1: Foreign Direct Investment: Equity, Loan, Interest and Dividend) ...