How to Register a Cooperative (Sahakari) in Nepal: Step-by-Step Guide

A cooperative, known in Nepali as a sahakari, is a member-owned, member-controlled organisation formed voluntarily to meet common economic, social and cultural needs. In Nepal, cooperatives span savings and credit, agriculture, dairy, multipurpose, consumer, savings, and labour-and-skill based models, and they operate on the internationally recognised cooperative principles of open membership, democratic control (one member, one vote) and member-centric benefit.

The governing law is the Cooperatives Act, 2074 (the Cooperatives Act, 2017 in the Gregorian calendar), which was published on 1 Shrawan 2074 BS. Chapter 2 of this Act, covering Formation and Registration, is the core of the registration process, with Section 3 setting who may form an organisation and Sections 14 and 15 governing the application and its registration. Cooperative rules and the schedules to the Constitution of Nepal also distribute cooperative powers across the federal, provincial and local levels.

Registration is mandatory before a cooperative can legally operate. Section 13 of the Act makes clear that no organisation may carry on transactions as a cooperative unless and until it is registered and holds a registration certificate. This is why the founding steps below must be completed and approved before a sahakari opens for business or collects share capital and deposits from members.

Eligibility to form a sahakari is defined by both the Act and the rules and practice of the registering authority. Under Section 3 of the Cooperatives Act, 2074, at least three Nepali citizens may form a sectoral or multipurpose cooperative. In practice, however, provincial and local cooperative rules commonly require a larger founding group — a minimum of 30 members is widely applied for a primary thematic or multipurpose cooperative at the local level, so intending founders should confirm the exact figure with their local cooperative office before proceeding.

The Act also sets special thresholds for particular models. A cooperative based on labour and skills (involving workers, youths and similar members) may be formed by 15 Nepali citizens. A savings-and-credit cooperative operating in a Metropolitan City or Sub-Metropolitan City requires the participation of at least 100 Nepali citizens. These higher counts reflect the greater financial risk and public-interest oversight attached to deposit-taking cooperatives in dense urban areas.

At the time of formation, the required number of members must be met at the rate of one member per family — that is, each founding member should represent a distinct household. This one-member-per-family restriction applies only during formation; once the cooperative is registered, more than one person from the same family may take up membership. All founders must be Nepali citizens residing within the working area proposed for the cooperative.

The registration journey begins with a preliminary meeting of the intending members. At this meeting the group agrees on the type and objective of the cooperative, its proposed name and working area, the minimum share each member will subscribe, and who will serve on an ad-hoc or founding committee to drive the registration forward. A chairperson is chosen to lead the meeting, and detailed minutes are recorded because these minutes become a required supporting document.

The founding meeting also resolves to adopt the proposed bylaws (byelaws), to commission the feasibility study, and to authorise named individuals to file the application on the group's behalf. The attendance sheet, signed by all founding members with their citizenship details, is prepared here. Because the registering authority scrutinises whether the group is genuinely community-based and member-driven, careful, honest minute-taking at this stage strengthens the application.

Founders should keep the proposed working area realistic and consistent with the tier at which they intend to register. A cooperative meant to serve a single ward or municipality is a local-level (primary) cooperative, and its meeting decisions should reflect that limited geographic scope rather than a province-wide or national ambition.

Section 14 of the Act requires two substantive documents to accompany the application: the proposed bylaws and a feasibility study report. The feasibility study should demonstrate that the cooperative can realistically be operated and sustained — outlining the member base, the intended services, projected share and deposit collection, expected income and expenses, and how the enterprise will remain member-centric and community-based. For savings-and-credit and larger cooperatives, a more rigorous financial projection is expected.

The bylaws are the constitution of the cooperative and must be consistent with the Cooperatives Act, 2074 and its rules. They typically set out the name and address, objectives and working area, membership conditions, the value and rules of shares, the powers of the general assembly and board, meeting and quorum rules, profit distribution and reserve funds, audit arrangements, and procedures for amendment and dissolution. Model bylaws issued by the Department of Cooperatives are commonly used as a starting template and then adapted.

When the Registrar reviews the application, one of the key tests is whether the submitted bylaws conform to the Act and rules, and whether there is a clear basis that the cooperative can be run according to cooperative values and principles. If minor amendments to the bylaws are needed, the Registrar may register the cooperative subject to conditions requiring those corrections.

The registration application is made in the prescribed format and must be supported by a complete document set. The core statutory attachments under Section 14 are the proposed bylaws, the feasibility study report, and details of the number and amount of shares each member has undertaken to subscribe, along with other particulars as prescribed. Missing or inconsistent documents are the most common cause of delay, so the file should be assembled carefully.

In addition to the statutory attachments, registering offices in practice ask for the minutes of the preliminary and founding meetings, the signed list of founding members with copies of their citizenship certificates, evidence of the collected share capital (such as a bank deposit voucher), and proof of the proposed office address. Cooperatives that intend to operate as a cooperative bank require, under Section 14, the prior approval of Nepal Rastra Bank (the central bank) in addition to the standard documents.

Applicants should confirm the precise checklist and any local fees with the specific office handling their tier, because supplementary requirements can vary between local governments and provinces. Keeping a spare copy of every document is advisable, as the authority retains the originals of some items on file.

Nepal's federal structure means cooperatives are registered at one of three tiers according to their scope. A primary (basic) cooperative operating within a single local government files with the authority authorised by the Registrar — in practice the cooperative section or office of the concerned Rural Municipality, Municipality or the district-level cooperative office. Provincial-level associations register with the provincial cooperative registrar, while central sectoral associations, special associations, the national federation and cooperative banks register with the federal Registrar under the Department of Cooperatives.

Filing is increasingly handled through COPOMIS, the Cooperative and Poverty Related Management Information System (commonly referred to as the Cooperative Organisation and Management Information System). COPOMIS is the Department of Cooperatives' official digital platform for registering, reporting on and monitoring cooperatives across the country, and it is progressively becoming the primary channel for new registrations and annual reporting. Founders or their authorised representative submit the application and scanned documents through the relevant office's COPOMIS workflow, alongside the physical file where the office still requires hard copies.

Choosing the correct tier at the outset matters, because filing at the wrong level leads to rejection and re-filing. If in doubt, most founders begin with their local government's cooperative office, which handles the large majority of primary cooperatives and can advise on whether a higher-tier registration is required for the intended scope.

Once a complete application is filed, the Registrar or the authorised authority conducts an inquiry into the documents. Under Section 15 of the Cooperatives Act, 2074, the authority is required to register the cooperative and issue a registration certificate in the prescribed format within 30 days of the filing of the application, provided the bylaws conform to the Act and rules and there is a clear basis that the cooperative can operate on a member-centric, community-based footing.

If shortcomings are found, the Registrar may either prescribe conditions — such as amendments to the bylaws — that the cooperative must fulfil before or shortly after registration, or, in cases where the legal tests are not met, refuse registration under the refusal provisions of the Act. A refusal must be communicated with reasons, and the founders may correct the deficiencies and re-apply. In practice, real-world timelines can extend beyond the statutory 30 days where documentation is incomplete or verification is needed, so applicants should treat the statutory period as a target rather than a guarantee.

After the certificate is issued, the cooperative acquires legal personality and may begin operations: opening a bank account in the cooperative's name, calling its first general assembly, electing the board and accountability committee, and starting to collect shares, savings and deposits. Registered cooperatives then carry ongoing obligations, including holding annual general assemblies, maintaining audited accounts, and filing regular returns through COPOMIS.