Meaning of Charges
As per Section 2 (16) of the Companies Act, 2013 , charges means an interest or lien created on the property or assets of the company or any of its undertakings or both as security and includes a mortgage.
Essential Features of Charges
|There should be 2 parties:- creator of charge and chargeholder.||There should be a subject matter of charge, which may be current or future assets.||The intention of borrower, in respect of repayment of borrowed money plus interest at agreed rate, should be displayed by an agreement entered by him.|
Registration of Charges
All types of charges are required to be registered whether:
- Created within or outside India.
- Created on property or assets or any of the company’s undertaking.Creation is tangible or otherwise, situated in or outside India.
**If the company fails to register the charges within 300 days of creation or modification or within 30 days of satisfaction, then it may seek extension from Central Government to condone the delay.
Satisfaction of charges
The company shall give intimation to the Registrar within 30 days of payment or satisfaction of charges.
** The Registrar shall issue a notice to the charge-holder within 14 days, if the satisfaction form (i.e. Form CHG-4) is not signed by the holder or if it is not satisfied with intimation made by the company. If no response comes from the holder then the Registrar shall record the same and inform the company.
Consequences of Non-Registration Of Charges
Following are the consequences of non-registration:-
- Charge becomes void.
- Charge holder becomes unsecured.
- Debt is still recoverable.
- Company is penalized for the same.
Penalty for Non-Registration Of Charges
|Applicable to||Fines and penalties|
|Company||Rs 1,00,000 to Rs 10,00,000|
|Officer in default||
Imprisonment- Upto 6 months
Fine- Rs. 25,000 to Rs. 1,00,000
Particular 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 authorizing the creation of the charge; (in case of issue of secured debentures
(d) general description of the property charged;
(e) a copy of the deed/instrument containing the charge duly certified
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.
List Of E-Filing Under Charge
|1||CHG-1||Creating or modifying the charge (for other than Debentures)|
|2||CHG-2||Certificate of registration|
|3||CHG-3||Certificate of modification of charge|
|4||CHG-4||Intimation of the satisfaction to the Registrar|
|5||CHG-5||Memorandum of satisfaction of charge|
|6||CHG-6||Notice of appointment or cessation of receiver or manager|
|7||CHG-7||Register of charges|
|8||CHG-8||Application for condonation of delay shall be filed with the Central Government|
|9||CHG-9||Creating or modifying the charge in (for debentures including rectification)|
|10||CHG-10||Application for delay to the registrar|