Introduction: Registration of charges with the Registrar of Companies (ROC) is a critical compliance requirement under the Companies Act, 2013, governing the process of documenting charges or securities created by a company. This procedure is vital for maintaining transparency and accountability in financial transactions, particularly in the creation or modification of charges over a company’s assets. The Act, complemented by the Companies (Registration of Charges) Rules, 2013, outlines the specific forms to be used, deadlines for registration, and the consequences of failing to meet these requirements.
CHARGES
1. Registration of Charges Under Companies Act 2013-
According to section 77(1) of the Companies Act, 2013 and Rule 3 of Companies (Registration of charges) rules, 2013-
Every company creating/modifying charge, whether in India or outside India shall register the particulars of charge signed by the company and charge holder within 30 days from creation of charge.
2. Forms for Creation or Modification of Charge-
- CHG-1 for charges other than debenture.
- CHG-9 for debenture including modification.
3. Registrar May, on an Application by the Company, Allow Such Registration to Be Made-
- If the charge created before 02-11-2018, within a period of 300 days from creation of such charge.
- If the charge created on or after 02-11-2018, within a period of 60 days from creation of such charge, on payment of additional fees as may be prescribed.
4. If Registration Is Not Made Within Prescribed Time Limit-
- For first proviso of Point 3, within 6 months from 02-11-2018, on Payment of additional fees as may be prescribed for different class of companies.
- For second proviso of Point 3, allow such registration within the further 60 days after payment of ad valorem fees as may be prescribed.
5. Certificate of Registration of Charge-
a. Where a charge is registered with registrar he shall issue certificate of registration in form CHG-2.
b. Where a charge is modified with registrar he shall issue certificate of modification in form CHG-3.
6. Register of Charges-
- The registrar in respect of charge of every company shall maintain particulars of charges registered under the chapter in form as may be prescribed.
- Register of charge shall be open for inspection on payment of prescribed fess.
7. Company Register of Charges-
a) Every company shall keep register of charges at registered office of company in Form CHG-7.
b) Every member/creditor can inspect instrument of charge without payment of fees.
c) Any other person can inspect instrument of charge after payment of fees as prescribed.
8. Satisfaction of Charge-
- A company shall within a period of thirty days from the date of the payment or satisfaction in full of any charge registered give intimation of the same to the Registrar in Form CHG-4 along with the fee.
- Where the Registrar enters a memorandum of satisfaction of charge in full he shall issue a certificate of registration of satisfaction of charge in Form CHG-5.
9. Penalty for Contravention-
- If any company is in default in complying with any of the provisions of this Chapter, the company shall be liable to a penalty of five lakh rupees.
- 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 in accordance with the provisions of section 77, he shall be liable for action under section 447.
Conclusion: The registration of charges with the ROC under the Companies Act, 2013, is an essential element of corporate governance, ensuring that all financial securities and encumbrances on a company’s assets are properly documented and accessible for scrutiny. Adherence to the specified forms, adherence to deadlines, and understanding the implications of non-compliance are crucial for maintaining the legal standing of the company’s financial dealings. As such, companies must navigate these requirements with diligence and accuracy to uphold transparency and accountability in their operations.
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