Nepal Government has opened the door for Cooperatives to register and operate industry. As per Section 17 (5) of the Industrial Enterprises Act 2076 Cooperatives may register industry and the industry shall be under the ownership of the Cooperatives.

As per the Industrial Enterprises Rules 2078 following types of Cooperatives registered and operating as per prevailing laws are allowed to register industry subject to the Industrial Enterprises Act 2076, Industrial Enterprises Rules 2078 and the Bylaws of the Cooperative.

• Producers’ Cooperative Societies or Association ,
• Consumers’ Cooperative Societies or Association,
• Labor Cooperative Societies or Association, or
• Multipurpose Cooperative Societies or Association.

However, Financial Cooperatives carrying on Savings and Credit transactions are not allowed to register industry.

In order to register industry, a Cooperative is required to submit an application in prescribed format including following documents:

• Copy of Bylaws of the Cooperative
• Certified copy of the decision of general meeting regarding registration and operation of industry
• If representative has been appointed to make the application, than the authorized letter for the same
• Recommendation of the Local level authority where the industry is to be established
• Audit Report of the Cooperative for the period up to the previous year
• Details of Shareholdings of the share holder members

As per the Industrial Enterprises Rules 2078, Cooperatives can also operate sick industries which are declared as sick by Nepal Government. In order to operate the sick industries, the Cooperatives need to comply with following terms and conditions:

• Goods and services shall be produced as per the approved purpose and capacity of the industry.
• Terms specified at the time of registration of industry ,
• Terms specified in the approved EIA report ,
• Terms of agreement between investors of the sick industry and the Cooperative ,
• Directions and orders given by the Industry registering authority

Reanda Biz Serve Comments

Allowing Cooperatives to operate industry will encourage Cooperative members to register and operate industry that matches with the nature and objective of Cooperative. This will benefit not only the Cooperative members, but also the society at large. As our economy is highly dependent on import for almost everything, encouraging the Cooperatives to open new industry or operate sick industry is a positive move.

To view more articles like this do visit our website www.bizserve.com.np and subscribe to the newsletter to get frequent updates.

‍