Chapter VI of the Companies Act 2013 containing sections from 77 to 87 and The Companies (Registration of Charges) Rules, 2014 provide the law for registration, modification and satisfaction of Charge.
Duty to Register Charges
It shall be the duty of every company creating a charge within or outside India, on its property or assets or any of its undertakings, whether tangible or otherwise, and situated in or outside India, to register the particulars of the charge signed by the company and the charge-holder together with the instruments, if any, creating such charge.
Form for registration of Charge
The form prescribed for registration of Charge are Form No.CHG-1 (for other than Debentures) or Form No.CHG-9 (for debentures including rectification) on payment of such fees and in such manner as may be prescribed, with the Registrar within thirty days of its creation.
Roc Fees on registration of Charge:
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(a) in respect of a company having a nominal share capital of upto 1,00,000. Ie till Rs. 99,999 |
Rs. 200 |
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(b) in respect of a company having a nominal share capital of Rs. 1,00,000 or more but less than Rs.5,00,000. |
Rs. 300 |
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(c) in respect of a company having a nominal share capital of Rs. 5,00,000 or more but less than Rs.25,00,000 |
Rs. 400 |
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(d) in respect of a company having a nominal share capital of Rs.25,00,000 or more but less than Rs. 1 crore or more. |
Rs. 500 |
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(e) in respect of a company having a nominal share capital of Rs. 1 crore or more. |
Rs. 600 |
Additional fees on delay in filing registration of Charge:
If the Registration of Charge cannot be done within 30 days of creation of charge the Registrar may, on an application by the company, allow such registration to be made within a period of sixty days of such creation, on payment of additional fees. Additional Fee is 4 times of normal filing fees.
Advalorem fees on delay in filing registration of Charge:
And if the Registration of Charge cannot be done within 60 days of creation of charge,the Registrar may, on an application, allow such registration to be made within a further period of sixty days after payment of advalorem fees
Following is the advalorem fees :
ie
Upto 29 days: Normal fees
From 30th day to 60th day : Normal fee + Additional Fees
If the delay is beyond 60 days
From 30th day to 120th day: Normal fee + Additional Fees +valorem fee
What if the filing couldnot be done on 120th day – File Condonation of delay.
– Notwithstanding anything contained in any other law for the time being in force, no charge created by a company shall be taken into account by the liquidator 1[“appointed under this Act or the Insolvency and Bankruptcy Code, 2016, as the case may be,] or any other creditor unless it is duly registered under sub-section (1) and a certificate of registration of such charge is given by the Registrar under sub-section (2).
– Nothing in sub-section (3) shall prejudice any contract or obligation for the repayment of the money secured by a charge.
Charge holder can also apply for registration of charge .
Where a company fails to register the charge within the period of thirty days as prescribed without prejudice to its liability in respect of any offence under this Chapter, 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, and the Registrar may, on such application, 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 fees precribed:
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.
Company to Report Satisfaction of Charge
(1) A company shall give intimation to the Registrar in Form No.CHG-4 of the payment or satisfaction in full of any charge registered under this Chapter within a period of thirty days from the date of such payment or satisfaction.
4Provided that the 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 as prescribed.
Company’s Register of Charge
(1) Every company shall keep at its registered office a register of charges in Form No. CHG.7 and in such manner as may be prescribed, which shall include therein all charges and floating charges affecting any property or assets of the company or any of its undertakings, indicating in each case such particulars as may be prescribed:
Provided that a copy of the instrument creating the charge shall also be kept at the registered office of the company along with the register of charges.
(2) The entries in the register of charges maintained by the company shall be made forthwith after the creation, modification or satisfaction of charge, as the case may be.
(3) Entries in the register shall be authenticated by a director or the secretary of the company or any other person authorised by the Board for the purpose.
(4) The register of charges shall be preserved permanently and the instrument creating a charge or modification thereon shall be preserved for a period of eight years from the date of satisfaction of charge by the company.
(5) The register of charges and instrument of charges, kept under sub-section (1) shall be open for inspection during business hours—
(a) by any member or ceditor without any payment of fees; or
(b) by any other person on payment of such fees as may be prescribed,subject to such reasonable restrictions as the company may, by its articles, impose.
Rectification by Central Government in Register of Charges
The Central Government on being satisfied that —
(a) the omission to give intimation to the Registrar of the payment or satisfaction of a charge, within the time required under this Chapter; or
(b) the omission or misstatement of any particulars,in any filing previously made to the Registrar with respect to any such charge or modification thereof or with respect to any memorandum of satisfaction or other entry made in pursuance of section 82 or section 83,was accidental or due to inadvertence or some other sufficient cause or it is not of a nature to prejudice the position of creditors or shareholders of the company, it may, on the application of the company or any person interested and on such terms and conditions as it deems just and expedient, direct that the time for the giving of intimation of payment or satisfaction shall be extended or, as the case may require, that the omission or misstatement shall be rectified.
The application to filed in Form No. CHG–8 along with an affidavit and declaration as to :
1 the delay in filing the particulars of satisfaction or omission or misstatement of any particulars with respect to creation/modification/satisfaction, was accidental or due to inadvertence or some other sufficient cause and are or is not of a nature to prejudice the position of the charge holder, shareholders or creditors of the company;
2 no prejudice would be caused to the charge holder(s) or any other creditor(s) of the company, if the delay is condoned for satisfaction of charge or omission or misstatement is rectified;
3 the company has not created or modified any other charge(s) whatsoever on the assets of the company, since the creation / modification of the present charge;
4 the company is carrying on the business as on the date of filing this application and no proceedings to wind-up the company have commenced or are pending against the company;
5 there is no litigation proceedings is pending before any court of law for which condonation of delay for satisfaction.
Punishment for Contravention.
(1) 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 and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees.
(2) 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.