𝐒𝐭𝐫𝐮𝐜𝐤-𝐎𝐟𝐟 𝐂𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬 𝐒𝐭𝐫𝐮𝐠𝐠𝐥𝐞 𝐖𝐢𝐭𝐡 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐒𝐮𝐫𝐯𝐢𝐯𝐚𝐥 𝐀𝐧𝐝 𝐂𝐨𝐦𝐩𝐥𝐢𝐚𝐧𝐜𝐞

…𝒎𝒂𝒏𝒚 𝒄𝒐𝒎𝒑𝒂𝒏𝒊𝒆𝒔 𝒄𝒊𝒕𝒆 𝒔𝒕𝒂𝒇𝒇 𝒔𝒉𝒐𝒓𝒕𝒂𝒈𝒆𝒔 𝒂𝒏𝒅 𝒕𝒆𝒄𝒉𝒏𝒊𝒄𝒂𝒍 𝒊𝒔𝒔𝒖𝒆𝒔 𝒊𝒏 𝒎𝒆𝒆𝒕𝒊𝒏𝒈 𝒄𝒐𝒎𝒑𝒍𝒊𝒂𝒏𝒄𝒆 𝒓𝒆𝒒𝒖𝒊𝒓𝒆𝒎𝒆𝒏𝒕𝒔 𝒘𝒉𝒊𝒍𝒆 𝑪𝑹𝑨 𝒍𝒂𝒖𝒏𝒄𝒉𝒆𝒔 𝒕𝒓𝒂𝒊𝒏𝒊𝒏𝒈 𝒑𝒓𝒐𝒈𝒓𝒂𝒎 𝒕𝒐 𝒔𝒖𝒑𝒑𝒐𝒓𝒕 𝒇𝒊𝒓𝒎𝒔 𝒍𝒂𝒄𝒌𝒊𝒏𝒈 𝒊𝒏𝒕𝒆𝒓𝒏𝒂𝒍 𝒄𝒂𝒑𝒂𝒄𝒊𝒕𝒚

By Yeshi Dolma

A wave of concern spread through the private sector after the Corporate Regulatory Authority (CRA) published a list identifying 135 companies that failed to meet regulatory requirements. Initially, 215 companies were flagged for non-compliance and given a deadline of May 5 to update their records following a public notice on April 4. Only 80 complied. The remaining 135 were classified based on how long they had been inactive: 40 companies dormant for two years, and 95 for three years.

On May 9, the CRA issued a second public notice, extending the deadline to June 13 for companies to update their filings. Of the 40 companies dormant for two years, 19 complied by the deadline. Among those dormant for three years, only 21 of 95 companies responded. This leaves 95 companies still unaccounted for.
“In the past, we simply suspended non-compliant companies. But this is no longer adequate,” said Karma Yeshey, Registrar of Companies. “A suspended company is essentially a non-functional entity, like an individual who has passed away and cannot legally conduct business. Going forward, until a company regularizes its status, it will not be permitted to operate or renew its license, unlike before.”

The publication of the list surprised many business owners. The owner of eDruk Private Limited said she only learned of her company’s status through the announcement. Her staff had submitted the required documents online but did not follow up. A technical issue between the online portal and CRA’s system caused the submission to go unregistered. After learning of the issue, she visited the CRA office personally the next day to complete the filings. She also pointed out that high staff turnover- three to four employees had left within a year, many migrating to Australia- had created gaps in institutional knowledge, making it difficult to meet compliance deadlines. Since her intervention, eDruk Private Limited has been reinstated as compliant and registered.

Another business owner described the compliance process as simple but noted that the mid-year submission period can be easily missed. “Our company has just a handful of staff, and we all wear multiple hats,” he said. He was on medical leave during the submission period and pointed out that finding and retaining skilled staff has become increasingly difficult. “It would have been helpful if the CRA had reached out directly before publishing the list,” he added. The public listing damaged the company’s reputation. “Clients called asking whether we were shutting down, and some ongoing contracts were put on hold,” he said. “We managed to resolve the issue with CRA, but rebuilding trust with partners is taking time.”

For some businesses, the consequences were irreversible. The owner of a private construction company said the list was the final blow after struggling since 2021. The company faced rising debt, no new projects, and had not recovered from the economic effects of the COVID-19 pandemic. “We had been struggling, but we hoped things would turn around. This announcement ended it,” he said. He cited workforce shortages and inadequate institutional support as key factors. “In other countries, the private sector has access to financial cushioning or stimulus, but here, without government support, it’s extremely difficult,” he explained. “We simply did not have the bandwidth to meet all the regulatory filings and keep the business afloat.”

Another owner confirmed the difficult decision to close their business despite efforts to adapt. “We explored partnerships, digital solutions, and even cutting down operational hours to save costs,” the owner said. “But it was not enough. We were constantly firefighting, and by the time the struck-off list came out, we were already stretched too thin.” The public nature of the list added to the challenge. “It felt like public shaming. Our vendors and partners hesitated to work with us. That’s when I knew it was time to let go.”

In response to these challenges, the CRA launched the Corporate Filing Agent Certification Training, a three-day program held from June 26 to 28, 2025. Registrar Karma Yeshey said the training aims to professionalize compliance support by preparing consultants who can assist companies lacking internal capacity. “The program moves us from informal freelance filing to due diligence-based professional documentation and advisory services,” he said.

He explained that post-pandemic, many smaller private limited companies lost staff with compliance expertise. Of about 600 registered companies, 400 are private firms, many without personnel familiar with the legal, financial, or regulatory obligations under the Companies Act. “In many of these companies, the finance officer or accountant was the only person who understood compliance- and they have left. We are seeing this brain drain impact our regulatory ecosystem.”

“This training will equip professionals from finance, legal, or accounting backgrounds to offer cost-effective, technically sound compliance support across multiple companies,” he added. “It will help ensure that even smaller businesses without internal capacity can meet their legal obligations.”

After two years of poor compliance reviews and feedback from companies admitting they lack knowledge or capacity to meet evolving obligations, the CRA believes this initiative will foster a sustainable ecosystem of trained experts to support the private sector. The goal is to help businesses avoid costly errors and reputational risks going forward.
With corporate governance under scrutiny, both businesses and regulators are recognizing that compliance is no longer a box-ticking exercise. It is now a crucial element of operational credibility and survival.