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.
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.
Section 77 of Companies Act, 2013 deals with registration of Charges.
Section 77(1) Charge may be created:
Shall be registered.
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.
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-
Charge beyond 60 Days:
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.
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.
|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 firstname.lastname@example.org
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