(Under New Companies Act, 2013 with reference to The Companies (Registration of Charges) Rules, 2014)
[Submitted by CA. VMV S Rao,
Nellore, Andhra Pradesh]
May 6, 2014
Meaning of “Charge”
- As per Section 2(16) of the Companies Act, 2013, “Charge” means an interest or lien
created on the property or assets of a company or any of its undertakings or both as
security and includes a mortgage.
- The scope of the term “charge” has been enlarge. All types of charges would be
required to be registered, whether created within or outside India, on its property or
assets or any of its undertakings, whether tangible or otherwise, and situated in or
outside India. (Refer Section 77)
Creation /Modification of Charge
- To create or modify charge, the company is required to fill the particulars of charge in
Form No.CHG-1 (for other than Debentures) or Form No. CHG-9 (for debentures
including ratification), as the case may be, duly signed by the Company and the Charge
Holder and filed with the Registrar of Companies within a period of 30 days of its
creation along with the fees.
- The additional period for registration of charge has been increased from 30 days to 270
days. Now, the Company can file Form No. CHG-1 or Form No.CHG-9 within a period of
300 days from the date of creation or modification of charge along with additional fees.
- If the charge is not registered within additional period of 270 days, then the application
for condonation of delay to be made to Central Government in Form No.CHG-8 or Form
No.CHG-9, as the case may be, along with additional fee, for seeking extension of any
further time. A declaration from Company stating that such belated filing shall not
adversely affect rights of any other intervening creditors of the company shall be
attached to Form No.CHG-8.
- If there is any rectification of omission or misstatement of any particulars in respect of
creation/modification/satisfaction of charge can also be to the Central Government in
- The order passed by the Central Government based on submission of Form No.CHG-8
shall be required to be filed with the Registrar of Companies in Form No. INC-28 along
with fee as per conditions stipulated in the said order.
- If the company fails to register the particulars of the charge with the registrar within the
period of 30 days of its creation or modification, the particulars of the charge together
with a copy of the instrument, if any, creating or modifying surcharge may be filed by
the charge-holder in Form No.CHG-1 or Form No.CHG-9, as the case may be, duly signed
along with fee. The Registrar may, on such application, within a period of 14 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 of such fees. The charge-holder is entitled to recover from the company the
amount of any fees or additional fees pay by him to the registrar for the purpose of
registration of charge.
- The Registrar of Company shall issue Certificate of Registration of Charge in Form No.
- The Registrar of Company shall issue Certificate of Modification of Charge in Form
Satisfaction of Charge
- A company shall within a period of 30 days from the date of payment or satisfaction in
full of any charge registered, give intimation of the same to the Registrar in Form
- Similar to registration of charge, satisfaction of charge can also be intimated within an
additional period of 270 days on payment of additional fees to the Registrar.
Issues in Satisfaction of Charge
- As per Rule 12, where the satisfaction of the charge is not filed within 30 days
from the date on which such payment of satisfaction, the Registrar shall not
register the same unless the delay is condoned by the Central Government.
- The condonation of delay shall be made in Form No.CHG-8, if the satisfaction of
charge is not filed within 30 days from date on which such payment of
satisfaction as against 300 days in the case of creation/modification of charge.
- Whether additional period of 270 days is allowed for satisfaction of charge is not
The Registrar shall issue a Certificate of Registration of satisfaction of charge in Form
- If any person acquire a property, assets or undertaking for which a charge is already
registered, it would be deemed that he has complete knowledge of charge from the
date the charge is registered.
- The Registrar shall, in respect of every company, keep a register containing particulars
of charge so registered. The register shall be open for inspection on payment of fee.
- The notice of appointment or cessation of a Receiver or Manager shall be filed with the
Registrar in Form No.CHG-6 along with fee.
- Every company shall keep at its registered office a register of charges in Form No. CHG-7
with all particulars of charges registered with the Registrar as well as particulars of any
modification of a charge and satisfaction of charge.
- The Register of Charge in Form No.CHG-7 shall be preserved permanently.
- The instrument creating a charge or modification thereon shall be preserved for a
period of 8 years from the date of satisfaction of charge by the Company and the same
is open for inspection.
- If any company contravenes the provisions relating to charge, the prescribed
punishments has been increased.
- Company – Penalty –Minimum Rs. 1 lakhs and Maximum Rs.10 Lakhs.
- Officer-in-default- Imprisonment upto 6 months or with fine of RS.25,000/- to
Rs.1,00,000/- with both.