Charge as per section 2(16) of Companies Act, 2013 refers to creation of interest or a right on a property or asset of a company or any of its undertaking as a security against loan provided to the company in respect of such interest.

Charge is created by Companies who are in need of financial assistance for making their companies productive and in doing so creating any right or interest in assets of companies. Charge also includes mortgage. Charge is created so that the financial institutions such as banks have security for the loans provided by creation of charge on assets of company and having it registered with the Registrar.

Applicable Provisions for Creation or Modification of Charge under companies Act, 2013

1. Section 77 to 81 of Companies Act, 2013.

2. Companies (Registration of Charge) Rules, 2014.

Registration of Charges under Companies Act, 2013

A company creating a charge on its property situated within India or outside India shall register its charge with the Registrar within 30 days of creation or modification (in terms and conditions) of such charge along with particulars of Charge and a copy of instrument creating the charge signed by the Company and Charge-Holder in such Form specified below:

1. CHG-1: – For other than Debentures.

2. CHG-9: – For Debentures.

3. CHG-7: – Register of Charge (only to be maintained by company for its members).

Extension for Registration of Creation or Modification of Charge under companies Act, 2013

1. Charge created before commencement of Companies (Amendment) Ordinance, 2019, then extension shall be granted for 270 days more after expiry of 30 days.

2. Charge created on or after commencement of Companies (Amendment) Ordinance 2019, extension of 60 days from expiry of 30 days for registration to registrar shall be granted.

3. After the expiry of 60 days the charge can be registered within 6 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.

Failure to register Charge by Company

Charge holder may apply to registrar for Creation/Modification of charge on failure of the company to register the charge within 30 days with the registrar. The Registrar on such application of Charge holder give notice to the company for providing the reason for such delay in registration and shall within 14 days of sending such notice register the charge. The Charge holder is entitled to receive the fees paid by him on application for registration of charge with the Registrar from the Company.

Certificate of Registration for Creation or Modification of Charges

1. For Creation of Charge the registrar shall issue certificate as per Form CHG-2.

2. For Modification of Charge the registrar shall issue certificate as per Form CHG-3.

FEES for Creation or Modification of Charges under companies Act, 2013

Fees for filing within of Forms within due dates:

In case of Indian company having share capital

Sr. No. Nominal Share Capital Fee applicable
1. Less than 1,00,000 Rupees 200
2. 1,00,000 to 4,99,999 Rupees 300
3. 5,00,000 to 24,99,999 Rupees 400
4. 25,00,000 to 99,99,999 Rupees 500
5. 1,00,00,000 or more Rupees 600

In case of Indian company not having share capital: – Rupees 200.

In case of foreign company: – Rupees 6,000

Frequently Asked Questions on Creation or Modification of Charges

Q.1   Where Shall CHG-7 be maintained?

Ans. CHG-7 shall be maintained by company at its registered office and shall be open for inspection by members, creditors without any fee and shall also be maintained at the MCA website. 

Q.2 What shall be the date from which Companies (Amendment) Ordinance,2019 was  applicable?

Ans. Companies (Amendment) Ordinance, 2019 was effective from 02nd November, 2018. 

Note: Companies (Amendment) Ordinance was originally affected in year 2018 but was later repealed and substituted to Companies (Amendment) Ordinance, 2019. 

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The article is written by Team Anupama Tripathi & Associates and solely for the purpose of education and comment, for more you can connect us # 8800839633 or #[email protected]

Author Bio

Qualification: CS
Company: Anupama Tripathi & Associates
Location: New Delhi, Delhi, India
Member Since: 07 Apr 2021 | Total Posts: 19
Anupama Tripathi, the co-founder of Alliance Professional, she is a Company Secretary in Practice and pursuing Law from University of Delhi and did her graduation from Jesus & Mary Collage, University of Delhi. She has an experience of more than 5+ years. She did her internships from PSU liste View Full Profile

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