Streamline and optimize your financial operations with our Charge Management services.
Our expert charge management solutions ensure efficient, accurate financial processing, maximizing revenue and minimizing errors for your business.
* Excluding Govt. Fees
Meaning
Charge is a type of interest created on the asset of the company. It is defined under Section 2(16) of the Companies Act. A charge could be a fixed charge or a floating charge depending upon the assets. According to Section 77 of the act, it is the duty of a company to register its charges with the Registrar of Companies (ROC) within 30 days from its creation. According to Section 78 on failure of such registration of charge by the company within the required time, the person in whose favour the charge is created may apply to the Registrar for registration of such charge.
Charge Management
After a charge is created on a property of asset by the company, the process of charge management begins. It includes reporting to the Registrar regarding creation of charge, modification of charge and satisfaction of charge. The relevant documents must be filed with the Registrar of Companies within 30 days of creation or modification.
Particulars of charges
The following particulars in respect of each charge are required to be filed with the Registrar:
(a) date and description of instrument creating charge;
(b) total amount secured by the charge;
(c) date of the resolution authorising the creation of the charge; (in case of issue of secured debentures only);
(d) general description of the property charged;
(e) a copy of the deed/instrument containing the charge duly certified or if there is no such deed, any other document evidencing the creation of the charge to be enclosed;
(f) list of the terms and conditions of the loan; and
(g) name and address of the charge holder.
What is included in this
FAQs
A charge is a security created on a property or assets of a company. It also includes mortgage. It provides financial support to the company to operate, diversify and expand its business.
According to Section 77 it is mandatory for Companies to register their charges with the ROC. Non compliance creates a liability of compoundable offence where the company and/or its officers become liable to pay fines and may even attract penal charges.
According to Section 77 of the Companies Act, 1956, all types of charges created by a company are to be registered by the ROC, where they are non-compliant and are are not filed with the Registrar of Companies for registration, it shall be void as against the liquidator and any other creditor of the company.
This does not, however, mean that the charge is altogether void and the debt is not recoverable. So long as the company does not go into liquidation, the charge is good and may be enforced. Void against the liquidator means that the liquidator on winding up of the company can ignore the charge and can treat the concerned creditor as unsecured creditor. The property will be treated as free of charge i.e. the creditor cannot sell the property to recover its dues. Void against any creditor of the company means that if any subsequent charge is created on the same property and the earlier charge is not registered, the earlier charge would have no consequence and the latter charge if registered would enjoy priority. In other words, the latter charge holder can have the property sold in order to recover its money.
Thus, non-filing of particulars of a charge does not invalidate the charge against the company as a going concern. It is void only against the liquidator and the creditors at the time of liquidation. The company itself cannot have a cause of action arising out of non registration.
- CHG-1: Modification or creating the charge (except Debentures);
- CHG-2: Registration Certificate;
- CHG-3: Certificate of charge modification;
- CHG-4: Intimation of the Registrar’s satisfaction with the application;
- CHG-5: Memorandum of charge satisfaction;
- CHG-6: Notice of appointment or cessation of receiver or manager;
- CHG-7: Register of Charges;
- CHG-8: Application for condonation of delay shall be filed with the Central Government;
- CHG-9: Creating or modifying the charge in (for debentures including rectification);
- CHG-10: Application for delay to the Registrar
