On November 2, 2018, the Ministry of Corporate affairs promulgated an ordinance (the Ordinance) inter alia amending certain provisions of the Companies Act, 2013 (the Act). One of the amendments is for the purpose of reducing the extended timelines for filing a charge created by a company as per Section 77(1) of the Act upon payment of additional fees prescribed by the Registrar.
The Original Provisions of Section 77(1) of the Act as it stood prior to the amendment are as follows:
It shall be the duty of every company creating a charge to register the particulars of the charge signed by the company and the charge-holder together with the instruments, if any, with the Registrar within thirty days of its creation.
Provided that the Registrar may, on an application by the company, allow such registration to be made within a period of three hundred days of such creation on payment of such additional fees as may be prescribed.
The Ordinance seeks to reduce the timeline of 300 days
The Ordinance changes this to permit registration of charges:
If the charge is not registered within 300 days, it must be completed within six months from the date of the Ordinance i.e. 01st May, 2019.
If the charge is not registered within 60 days, the Registrar may, on an application, grant another 60 days for registration.
If a person wilfully furnishes false or incorrect information, or suppresses material information which is required to be registered under this provision, he will be liable for fraud under the Act.