Financial Year
Section 2(41) of Companies Act, 2013-
“Financial Year” for any company or body corporate is –
- a period ending on the 31st day of March every year.
(not need to be 12 months for counting One financial Year.)
- If Company incorporated on or after the 1st day of January of a year-
period ending on the 31st day of March of the following year
Example:
- Company incorporated on 01/07/2020 or 01/12/2020 or 10/11/2020 etc. , Financial year will end on 31/03/2021.
- Company Incorporated on 02/02/2021 or 01/01/2021 or 11/03/2021 Financial year will end on 31/03/20
Provisions are provided if company wants to follow different financial year :
A company or body corporate can follow different financial year only if it is
- Holding Company or
- Subsidiary or
- Associate Company
- of a company incorporated outside India and
is required to follow a different financial year for consolidation of its accounts outside India.
Approval Authority:
Regional director As per Rule 40 of Companies Incorporation rules,2014,
*Authority can allow any period as its financial year, whether or not that period is a year.
Procedure:
Application in Form No.RD-1 to concerned Regional Director.
Attachments:
(a) grounds and reasons for the application;
(b) a copy of the minutes of the board meeting at which the resolution authorising such change was passed, giving details of the number of votes cast in favour and or against the resolution;
(c) Power of Attorney or Memorandum of Appearance, as the case may be;
(d) details of any previous application made within last five years for change in financial year and outcome thereof along with copy of order
After examining the application,
- Rd may ask further information , or finds such application to be defective or incomplete in any respect, on the last intimated e-mail address of the person or the company, which has filed such application
- directing the person or the company to furnish such information, or to rectify defects or incompleteness and to re-submit such application .
- within a period of fifteen days,
- in e-Form No. RD-GNL-S.
Maximum of Two Re-Submissions shall be allowed.
In case information asked by RD is not provided within specified time then,
- the Regional Director shall reject the application with reasons within thirty days from the date of filing application or
- within thirty days from the date of last re-submission made as the case may be.
In case where the application is found to be in order,
Regional Director shall allow and convey the order within thirty days from the date of application or within thirty days from the date of last re-submission, as the case may be.
Deemed Approval:
- Where no order for approval or re-submission or rejection has been explicitly made by the Regional Director within the stipulated time of thirty days,
- it shall be deemed that the application stands approved and an approval order shall be automatically issued to the applicant.
Need to Inform Registrar
- Within 30 Days -The order conveyed by the Regional Director shall be filed by the company with the Registrar in
- Form No.lNC-28
- along with fee as provided in the Companies (Registration Offices and Fees) Rules,2014.
Definition provided as per Companies Act, 2013
“financial year”, in relation to any company or body corporate, means the period ending on the 31st day of March every year, and where it has been incorporated on or after the 1st day of January of a year, the period ending on the 31st day of March of the following year, in respect whereof financial statement of the company or body corporate is made up:
[Provided that where a company or body corporate, which is a holding company or a subsidiary or associate company of a company incorporated outside India and is required to follow a different financial year for consolidation of its accounts outside India, the Central Government may, on an application made by that company or body corporate in such form and manner as may be prescribed, allow any period as its financial year, whether or not that period is a year:
[Provided further that]] any application pending before the Tribunal as on the date of commencement of the Companies (Amendment) Ordinance, [2019], shall be disposed of by the Tribunal in accordance with the provisions applicable to it before such commencement]]]
Provided also that]] a company or body corporate, existing on the commencement of this Act, shall, within a period of two years from such commencement, align its financial year as per the provisions of this clause;
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