Section 2(16) of the Companies Act, 2013 defines charges also as to mean an interest or lien created on the property or assets of a company or any of its undertakings or both as security and includes a mortgage.

  • Types of Charges:

1. Fixed or specific Charge: it’s a charge on the assets which are either definite in nature or capable of being ascertained and defined at the time of creating the charge.

Example: Land, Buildings, plants or machinery.

2. Floating Charge: it’s a type of charge that doesn’t create on any definite property, but creates on a fluctuating type like stock-in-trade.

  • Registration of charges under the Act

Section 77 of Companies Act, 2013 deals with registration of Charges.

Section 77(1) Charge may be created:

  • Within or outside India.
  • On its property or assets or any of its undertaking.
  • Whether tangible or otherwise and situated in or outside India.

Shall be registered.

  • All the particulars relating to charge which is being filled with the Registrar of companies shall be signed by the company (Creating the charge) and the charge holder in form CHG-1(other than debentures) or Form CHG-9(For Debentures).

Section 77 – It is the duty of every corporation creating charge in any such form, on payment of such fees and in such manner as might be prescribed, with the Registrar within 30 days of its creation.

  • Registration of Charge beyond 30 days:

After Companies Amendment Ordinance, 2019 with effect from 2 November, 2018 with all earlier versions of the ordinance, provide that the Registrar may, on an application by the company, allow such registration to be made-

  • In case of charges created before the commencement of the Companies(Amendment) Ordinance,2019, within a period of three hundred days of such creation; or
  • In case of charges created on or after the commencement of the Companies (Amendment) Ordinance, 2019, within a period of Sixty days of such creation on payment of additional fees.

Charge beyond 60 Days:

  • In clause (a) to the first proviso, the registration of the charge shall be made within six months from the date of commencement of the Companies (Amendment) Ordinance, 2019, on payment of such additional fees as may be prescribed and different fees may be prescribed for different classes of Companies.
  • In clause (b) to the first proviso, the Registrar may, on an application, allow such registration to be made within further period of sixty days after payment of ad-valorem fees.
  • Notice of Charge:

Section 80 of Companies Act, 2013 states whenever charges created on any of its assets or any of its undertaking than any person acquiring such assets or undertakings it is assumed that the subsequent person acquiring any of its assets or undertakings has complete knowledge of charge registered.

  • Consequences of Non-Registration of Charges:

As per Section 77, if the charge is not registered with the ROC, the charge would not be taken into account by the liquidator or any creditor, not only in winding up case also when corporation is indebted towards repaying the money even if the charge was not registered.

The punishment for violating any provision of the Companies Act, 2013 is that the corporation would be punishable with a fine which would not be less than Rs. 1 Lakh and may extend to Rs. 10Lakhs and every officer punishable with a fine which would not be less than Rs.25000 which might extend to Rs. 1 Lakh or with an imprisonment of a term which may extend to 6 months or both.

> Register of charges

Registrar must maintain a register of charges for every corporation and must keep it open for inspection by any individual on payment of prescribed fees.

The corporation must maintain a register of charges in form CHG-7 with instrument creating charge at its registered office and keep it open for inspection in the course of business hours by members or creditors without fees.

  • E-Forms to be filed:
S.No E-Form Purpose
1 CHG-1 Application for Registration of Creating or modifying the charge (other than Debentures)
2 CHG-2 Certificate of Registration
3 CHG-3 Certificate of Modification of Charge
4 CHG-4 Intimation of the Satisfaction to the Registrar.
5 CH-5 Memorandum of Satisfaction to the registrar
6 CHG-6 Notice of appointment or cessation of receiver or manager.
7 CHG-7 Register of Charges.
8 CHG-8 Application for condonation of delay shall be filed with the Central Government.
9 CHG-9 Creating or modifying the charge in (for debentures including rectification)

Author- CS Aakansha Negi and contracted at

Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION.

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March 2024