Commerce is the backbone of any country's economy. Legislation plays an important role in establishing a strong commercial sector and making commercial activities simple, transparent, accountable and regulated.

Acknowledging the role and importance of the economy, industry and commerce sector, the Constitution of Nepal 2072 also strengthens the national economy through the participation and independent development of the public, private and cooperative sectors, giving importance to the role of the private sector in the economy and achieving economic prosperity by maximizing the available means and resources. It covers the policies related to economy, industry and commerce, mentioning the issue of prioritizing domestic investment for the development of the economy.

In addition, the industry, finance and trade sector play an important role in achieving the sustainable development goals that Nepal aims to achieve by 2030 and the goals of upgrading from the least developed category by 2026. 

Nepal Government, National Planning Commission published the commercial policy, 2072 implementation effectiveness study report, defining the overall nature of internal trade and international trade as a commercial sector, it has been mentioned that without internal capacity and production, it will be difficult to find a place in international trade.

However, even though policies, strategies, procedures, guidelines related to commercial, monetary, import, export and other sectors have been prepared in order to further strengthen the commercial sector, no reasonable effort has been made to improve the laws related to the commercial sector. Since any policy, procedure or guidelines should be subject to the original law, it is advisable to first study in detail what kind of reforms are needed in the laws that are directly related to this area.

In order to transform the social and economic of the nation, the existing legal system should be modified and improved in a contemporary manner. Relative achievement with the sector is possible only if timely laws are formulated to address the current needs of the commercial sector. Although there are many areas that need to be improved in the laws regulating commercial activities, there is a need to decriminalize or decriminalize such laws first.

At present, various countries of the world are organizing various laws that are arranged to create criminal liability under the commercial law. Under the commercial law, it seems that the legal provisions that criminalize various actions and punish them with imprisonment, the legal provisions that are mainly punishable with imprisonment should be replaced with legal provisions that create criminal liability and fines or other civil liability.

Criminal law should be used as a last resort rather than as the main tool for regulating commercial activities. It is necessary to analyze whether or not there is a need for legal provisions to punish acts done intentionally or intentionally in the laws created to regulate commercial activities in Nepal. 

It is unfair to criminalize activities that do not harm individuals, society or the environment. Therefore, the purpose of decriminalization is not to legitimize illegal activities, but to effectively implement existing laws by converting punishment for errors of law into compensation. In determining whether an act constitutes a criminal offence, the seriousness of the act, the punishable consequences arising from it, and whether the act was committed intentionally or negligently or in ignorance must be ascertained. But defining commercial activities as offenses and determining punishment seems to be done mechanically rather than judicially. 

In the same way, in the existing law, fixed imprisonment is provided for any crime, while imprisonment and fine are also fixed for any crime. Similarly, imprisonment is certain in an offense but the fine is indeterminate. There is also a provision for both lower and upper limits of imprisonment and fines. There is also only provision for upper limits of imprisonment and fines.

The punitive consequences of a crime must be commensurate with the seriousness of the crime and must strike a balance between the seriousness of the crime/violation committed and the punishment imposed. A criminal offense requires an appropriate punishment to be determined based on the culpability of the offender and the harm caused to the victim.

The public safety must be ensured by maintaining proportionality and uniformity in determining the appropriate and consistent punishment and sentence for persons found guilty of criminal offences. The amount involved in a crime of a financial nature should be the determining factor in the punishment of the offender. Even in the precedent principles propounded by the Supreme Court, the punishment of any crime should be determined based on relativity and proportionality. 

Neighboring country India in 2018 amended the Companies Act to reduce the 134 matters considered to be criminal offenses to 124. Similarly, the compandable offense for which the complainant can withdraw the complaint has also been reduced from 81 to 31. Similarly, in 2023, 42 laws applicable in sectors including agriculture, environment, media and publishing were amended through the Public Trust Act. The penalty imposed after the prosecution in the court has been replaced by the fee that can be determined by the administrative body and the punishment imposed by imprisonment has also been removed. 

In India, 42 laws were amended in 2013 in areas including agriculture, environment, media and publishing through the Public Trust Act. Through this Act, the penalty imposed after the prosecution in the court has been replaced by the fee that can be determined by the administrative body, imprisonment and prison sentence have also been removed. The Act has amended the offenses punishable by imprisonment in India to be punishable only by fine. In order to facilitate business in India, through the budget of 2023, it is proposed to amend the existing legal arrangements in the 42 Acts regularized by the Central Bank to reduce the process and decriminalize. 

It has been proposed to decriminalize the legal provisions that create criminal liability in the commercial laws regulated by the Reserve Bank of India by establishing an inter-ministerial committee. According to the prevailing legal system of Nepal, the special law related to the offense and the Civil Crime Code, 2074 are the main legal documents for prosecuting the criminal perpetrators who are govt and registering the case for individualism and providing appropriate punishment if it is proven that they have committed a crime.

Similarly, the special law regulating commercial activities and the provision of separate punishments in the Criminal Code, 2074 have created confusion regarding which crime will be prosecuted and punished according to which law. Thus, it is inevitable to create uniformity between the two different legal systems and remove or amend the legal systems that are not necessary. There are 29 legal provisions under the Company Act, 6 under the Value Added Tax Act, 7 under the Income Tax Act, and 4 under the Excise Act among the legal provisions that create criminal liability under the Commercial Law of Nepal.

For example, in the Standard Weights and Measures Act, 2025, which was created to maintain the standard of measurement and weight in the metric system, the punishment provided in the case of offenses related to the use of measuring instruments and the Civil Crimes Code, section 273 and section 274 of 2074, for making fake measuring instruments or Punishment has also been provided for the same act under the title of not to practice and not to fraudulently measure, weigh or determine the quality of instruments.

Currently, some signs of improvement have been seen in the draft of the bill made to regulate company relations. Although the 29 provisions related to punishment mentioned in the Companies Act, 2063 have been reduced in the bill, it seems that the maximum extent of imprisonment has been increased. In the current Companies Act, 2063, the maximum punishment is two years, while in the proposed bill, the maximum punishment is up to three years. Legal reform will prove to be an important milestone to achieve a double digit economic growth rate and fulfill the dream of a prosperous Nepal and a happy Nepali by comprehensively reforming the country's economy. The