.png)
Under
Companies Act, 2013 every company is obliged to have the financial year
starting from 1st of April to 31st March. Companies Act 2013 defines Financial
Year under Section 2(41) as:
“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 on an application made by a
company or body corporate, which is a holding company or a subsidiary of a
company incorporated outside India and is required to follow a different
financial year for consolidation of its accounts outside India,
the Tribunal may, if it is satisfied, allow any period as its
financial year, whether or not that period is a year:
Provided
further 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.
Major
takeways from provisions of Section 2(41) of the Companies Act 2013:
1.
Obligation
on all companies or bodies corporates to follow uniform financial year starting
from 1st of April and ending on 31st of March.
2.
From the
date of notification of the section, i.e., 01/04/2014, existing companies or
bodies corporates had a transitional period of 2 years to
align their financial year as per these provisions.
3.
Exceptions to
these provisions are available to those companies or body corporates, which is
a holding company or a subsidiary of a company incorporated outside India,
provided they make an application (in NCLT-1) to the Tribunal and take its
Approval.
4.
Justification given
while filing the application with the Tribunal can be as follows: Alignment
of Financial Year of the Subsidiary Company for consolidation of accounts as
per the laws of the land where the Holding Company is incorporated.
5.
As per
the orders passed by various benches of National Company Law Tribunal (NCLT),
the Tribunal is seeking a report from the jurisdictional Registrar of
Companies (ROCs), wherein the ROCs are being asked to give any
objection as to why the Tribunal should not Approve the application filed for
change in Financial Year.
Those who
are interested in knowing about the detailed procedure, please read on.
Procedural
Aspects to go about changing the Financial Year:
1.
Board Meeting: The Company needs to call Board Meeting for the purpose of passing the
following Resolutions:
·
Change in
financial year of the Company
·
Authorization
to the Company Secretary in practice for appearance before NCLT.
·
Executing
Memorandum of Appearance in form NCLT-12.
2.
Application to
the NCLT: The Petition under the sub-section (41) of Section 2 be
filed to the Tribunal in Form NCLT-1 and shall be accompanied
by such documents as are mentioned in Annexure –B.
·
NCLT 1: Petition
made in the NCLT-1 should include the following:
·
Details
of Original Application
·
Jurisdiction
of the Bench
·
Limitation:
(If applicable)
·
Facts of
the case are given below
·
Relief(s)
sought.
·
Particulars
of Bank raft evidencing payment of fee for the petition
·
Memorandum
of appearance
·
ANNEXURE B: Annexure –B of the NCLT rules, 2016 includes the following :
·
Copy of
Memorandum and Articles of Association.
·
Copy of
balance sheet of the Companies.
·
Affidavit
verifying the petition.
·
Bank
draft evidencing payment of application fee.
·
Memorandum
of appearance with copy of the Board’s Resolution.
·
Letter of
consent from the Holding Company to its Subsidiary Company to align its
financial year as per the financial year followed by the Holding Company
3.
Order of Tribunal: Certified copy of the order shall be filed with the
Registrar of Companies (ROC) in form INC-28 within thirty days.
Author
Qualified
Company Secretary
Vikram
Grover
Vgrover44@gmail.com
If
you like this article then please follow and Subscribe so that you can get our
updates in future ……..” freely
Disclaimer: The views and opinions expressed in this article are those of the
Author on the basis of relevant provisions, rules, notification,
circulars, orders, judgments and as per information prevailing at the time of
this article. The author and Blog https://vgknowledgeupdate.blogspot.in hereby do not propose to provide any sort
of professional advice/service through this article/write up. Moreover,
appreciate that any reliance on such article will not be considered as
advisory. Although , utmost care has been taken at time of writing up the
article to mitigate the chances of mistake/ omission/ error by the Author.
However, there is always room for some error or omissions. Therefore it is
requested to readers to check at your own end and confirm from professional
before acting on any of the information provided herein above by the Author.
Author and the Blog is not responsible for any loss or damage happened (if
any).
No comments:
Post a Comment