The Companies Act, 2013 when it was introduced had mandated that all companies will have a uniform accounting year i.e. April to March each year. But the Act had given exemptions to those companies who were holding or subsidiary or associate company of a company incorporated outside India and which were required to have a different financial year than from April to March, then such companies can make an application to the Tribunal for change in their financial year accordingly.
Many companies fell under that ambit and one of my client companies also was a subsidiary of a foreign holding company. Accordingly the application was made to the CLB (when it existed) and even the CLB officials were unaware at that time that such matters are required to come to them. The application and hearing was a farce and the request was granted automatically and mechanically. So much for ease of doing business. The companies act, 2013 when it got notified was replete with such draconian provisions.
Now vide the Companies Act, ordinance, 2018 that application process had been taken away and given to the Regional Director. Of course with the CLB having been extinguished, all such applications would have been going to the NCLT, which is a sheer waste of their time and resources.
In my view, it should be no approval and all that stuff. Company should just inform that it is changing its financial year because of the reasons specified. So much for ease of doing business.
Many companies fell under that ambit and one of my client companies also was a subsidiary of a foreign holding company. Accordingly the application was made to the CLB (when it existed) and even the CLB officials were unaware at that time that such matters are required to come to them. The application and hearing was a farce and the request was granted automatically and mechanically. So much for ease of doing business. The companies act, 2013 when it got notified was replete with such draconian provisions.
Now vide the Companies Act, ordinance, 2018 that application process had been taken away and given to the Regional Director. Of course with the CLB having been extinguished, all such applications would have been going to the NCLT, which is a sheer waste of their time and resources.
In my view, it should be no approval and all that stuff. Company should just inform that it is changing its financial year because of the reasons specified. So much for ease of doing business.
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