Question: One of our group company was incorporated in the month of October, 2015 and we wanted to close the financial statements for the First Financial Year either on June 30, 2016 or March 31, 2017.
Request you to kindly let us know if the same is possible
Answer:
As per Section 2(41) of 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 1st day of Januray of a year, the period ending on the 31st 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 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.
Conclusion; the financial year of the company can only close on March 31st every year with no gap in any year. However with an exception, in the event the company has its subsidiary or holding company outside India with financial year ending on June, then we can keep the financial year ending June but with the order of the Company Law Board under section 2(41) of the Act.
For more queries, contact CS Neha Seth at csnehaseth@gmail.com or call us at 9871903449
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