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NepalPrivate Industry
The history of incorporated private firms in Nepal is
short.
The Nepal Companies Act of 1936 provided for the
incorporation of
industrial enterprises on joint stock principle with
limited
liability. The first such firm, Biratnagar Jute Mills, was
a
collaborative venture of Indian and Nepalese
entrepreneurs. It was
formed in 1936 with initial capital of 160,000 Indian
rupees.
In response to shortages of some consumer goods during
World
War II (1939-45), fourteen private companies emerged in
such
diverse fields as mining, electrical generation, and paper
and soap
production. The initial capital invested in each of these
industries was small. In 1942 two paper mills emerged as
joint
ventures of Nepalese and Indian entrepreneurs. Industrial
growth
gained momentum after 1945, although the end of World War
II had
reduced the scarcity of goods and caused many of these
companies to
incur losses.
Under the Nepal Companies Act, there was no provision
for
private limited companies. In 1951, however, a new act was
implemented with provisions for private limited companies.
This act
encouraged the establishment of ninety-two new private
joint stock
companies between 1952 and 1964. Most of these companies
were much
smaller than existing companies. Under the provisions of
the 1951
act, public disclosure of the activities of the firms was
not
required, whereas the 1936 act allowed substantial
government
intervention. The Industrial Enterprises Act of 1974 and
its
frequent amendments shifted the government's emphasis on
growth
from the public to the private sector. However,
discrepancies
between policy and practice were evident, and the public
sector
continued to be favored.
Data as of September 1991
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