Q.1 What is meaning of Charge? [Sec 2 (16)]

‘Charge’ means 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.

Q.2 Which Charges are to be registered and to be registered by whom? [Sec 77 (1) & 78]

  • It is the duty of every Company to register the Charges created:

a. within or outside India;

b. on its property or assets or any of its undertakings;

c. whether tangible or otherwise;

within 30 days of creation of Charge.

However, when a Company fails to register the Charge within 30 days it can still register Charge till further 30 days by paying additional fees. Further if the Charge is still not registered the Registrar may, on an application, allow such registration to be made within a further period of sixty days after payment of such advalorem fees.

Where a company fails to register the charge within the period of thirty days of Creation, the person in whose favor the charge is created may apply to the Registrar for registration of the charge along with the instrument created for the charge, within a period of fourteen days after giving notice to the company, unless the company itself registers the charge or shows sufficient cause why such charge should not be registered, allow such registration on payment of such fees.

Provided that where registration is effected on application of the person in whose favor the charge is created, that person shall be entitled to recover from the company the amount of any fees or additional fees paid by him to the Registrar for the purpose of registration of charge.

FAQs on Creation, Modification, Satisfaction of Charge | Companies Act, 2013

Q.3 What shall be effect of registration of Charge?

  • Where a charge is registered with the Registrar, he shall issue a certificate of registration of such charge to the company and, as the case may be, to the person in whose favor the charge is created.

Q.4 Under what conditions the registration of Charge is mandatory other than on its Creation? 

  • The Conations are as under:

a. a company acquiring any property subject to a charge within the meaning of that section; or

b. any modification in the terms or conditions or the extent or operation of any charge registered.

Q.5 When a are the points to be kept in mind related to Register of Charge? 

  • The Registrar shall, in respect of every company, keep a register containing particulars of the charges registered in such form and in Form CHG 7.
  • The register shall be open to inspection by any person on payment of fee

Q.6 When a Charge Satisfaction is to be reported to the Registrar and by whom? 

  • A company shall give intimation to the Registrar, of the payment or satisfaction in full of any charge registered within a period of thirty days from the date of such payment or satisfaction.
  • However, Registrar may, on an application by the company or the charge holder, allow such intimation of payment or satisfaction to be made within a period of three hundred days of such payment or satisfaction on payment of such additional fees.

Q.7 What is/are the Punishment for Contravention non-Registration of Creation/Modification/Satisfaction/ maintenance for Register of Charge? 

  • If any company is in default in complying with any of the provisions related to Charge, the company shall be liable to a penalty of five lakh rupees and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees.
  • If any person wilfully furnishes any false or incorrect information or knowingly suppresses any material information, required to be registered, he shall be liable for action under section 447.

List of Form Related to Charges

Name of Forms   Particulars
CHG 1 Application to register the creation or modification of charge (other than debentures)
CHG 2 Certificate of registration of charge
CHG 3 Certificate of modification of charge
CHG 4 Intimation to the Registrar regarding particulars for the satisfaction of charge
CHG 5 Certificate of registration of satisfaction of the charge
CHG 6 Notice of appointment or cessation of a receiver or a manager
CHG 7 Register of charges created, modified and satisfaction by the company
CHG 8 Application to Central Government requesting an extension of time to file details of registration of creation or modification or satisfaction of charge as well as rectification any omission or misstatement of any details
CHG 9 Application for registering the creation or modification of charge for debentures including its rectification

******

(Author – CS Nayan Pitroda proprietor of Pitroda Nayan & Co., Company Secretary in Practice can be contacted at +91 8866021210 and/ [email protected])

Author Bio

More Under Company Law

One Comment

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

October 2021
M T W T F S S
 123
45678910
11121314151617
18192021222324
25262728293031