Change of Financial Year of a COMPANY under Companies act 2013
Lets start with meaning of Financial year:
Financial Year:
1. Section 2(41) of the Companies Act, 2013 specify the definition of Financial year of a Company/Body Corporate.
2. Financial year means the period ending on 31stof March of every year, or
3. In case if company/Body corporate has been incorporate on or after 1stJanuary of a year, the financial year ending on 31stMarch of that year I.e from January to March shall be the financial year in respect of the financial statement of the Company/ Body Corporate is prepared.
- First Proviso to S 2 (41) Only a company or body corporate, which is a holding company or a subsidiary company or associate company of a company incorporated outside India and is require to follow a different financial year for consolidation of its accounts outside India, can apply for change in its financial year, RD may if satisfied, allow any period as its financial year, whether or not that period is a year.
- In case of Specified IFSC public company or specified IFSC private company, which is a subsidiary of a foreign company, the financial year of the subsidiary may be similar to the financial year of its holding company and approval of RD shall not be required.
{Exemption notification under s 462 dated 04.01.2017}
Procedure
| S.No | Activity | Governing Provisions | Steps |
| 1. | Board Meeting | Section 2 (41) and 173 and secretarial standard-1 | To hold a meeting of Board or pass Board resolution by circulation:
To consider and approve change in financial year of the company; 2.Autthorising practicing CA/CS/CMA /advocate to appear before RD and execute a Vakalatnama or Memorandum of appearance. |
| 2. | Time –bound disclosures | Regulations 30 and 46(3) of te SEBI (LODR) Regulations,2015 | In case of listed company, make disclosure of the Board Meeting to stock exchange as soon as reasonably possible but not later 24 hours from the conclusion of Board Meeting and post the same on the website of the company within 2 working days. |
| 3. | Forms and documents Filing | First proviso to S 2(41) read with Rules 40(1) of the Companies (Incorporation) Rules, 2014 | File an application in Form RD-1 with RD for change in the Financial year of the company along with the requisite document and fee |
| Rule 40(2) of the Companies (Incorporation) Rules, 2014 | Where ,call for further information in case if he finds the application to be defective or incomplete,
ii. he can direct the person or the company to furnish such information, or to rectify defects or incompleteness, iii. he can direct to re-submit application within 15 days, in form RD-GNL-5, Note: Maximum two resubmission shall be allowed otherwise the application shall be rejected. |
||
| 4. | First proviso to S 2(41) read with rule 40(3) of the companies. | After hearing the Matter , RD may, if it is satisfied, allow any period as the financial year of the company. | |
| Order of RD
In case where an application are in order to the satisfaction of RD then he shall passed the order within 30 days from the date of filling the application with the RD or within 30 days of its last resubmission. ii. where no rejection or approval or resubmission has been explicitly made by the RD within the stipulated Time period then it shall be deemed that the application stands approved and approval order shall be automatically issued.
|
|||
| 5. | Time –Bound disclosures | Regulation 30 and 46(3) of the SEBI (LODR) Regulations,2015 | In case of listed company, make disclosure of the Board Meeting to stock exchange as soon as reasonably possible but not later 24 hours from the conclusion of Board Meeting and post the same on the website of the company within 2 working days. |
| 6. | Form and Documents Filing | Rule 40(4) of the Companies (Incorporation) Rules, 2014 | File the certified copy of the order of RD with ROC in Form INC-28 within a period of 30 days from the date of receipt of the order along with the requisite documents and fees. |
Documents Required
Application for change in financial year with RD- Form RD-1
1. Grounds and Reasons for the application.
2. Copy of the Minutes of the Board Meeting at which the resolution authorizing such change was passed giving details of the number of votes cast in favour and or against the resolution.
3. Power of attorney or Memorandum of Appearance as the case may be.
4. Details of any previous application made within last 5 years for change in financial year and outcome thereof along with copy of order.
5. Copy of order of RD (For Filing with ROC – Form INC-28)
Author Bio
In reference to point no. 3 above need to correct something
“In case if company/Body corporate has been incorporate on or after 1st January of a year, the financial year ending on 31st March of following year I.e from January to March shall be the first financial year in respect of the financial statement of the Company/ Body Corporate is prepared.” thus it can be more than 12 months. subsequently a period of April to March can be followed until calender year is being followed.