Creation /Modification/Satisfaction of Charge with ROC

WHY CREATION OF CHARGE ON COMPANY’S ASSETS

Almost all the Companies requires fund for their project. Companies have lots of method to finance their project and almost all the Companies depend upon share capital and borrowed capital for financing their projects. Borrowed capital may consist of funds raised by-

1- Issuing debentures (secured or unsecured)
2- Obtaining financial assistance from financial institution or banks

We are here to discuss on 2nd point i.e. to obtain financial assistance from financial institution or banks, But as of no FI/Bank will provide their fund until they are secured for repayment of their monies.

To secure lender’s fund, Borrower Company provide their assets and properties as a security for the repayment of amount along with interest to the lender. It’s called Charge.

PROPERTY ON WHICH REGISTRATION OF CHARGE REQUIRED

As per section 77(1) Company will create a charge within or outside india, on its property or assets or any of its undertaking, whether tangible or otherwise, and situated in or outside india.

DUTY OF REGISTRATION OF CHARGE

As per Section 77 of the Companies Act, 2013 (Act), it is duty of the borrower Company to create charge whereas the Old Act (Companies Act, 1956) provided burden on both the Bank and the Company.

As per Section 78 of the Act, if Company fails to register of charge within 30 days then, the person in whose favor charge is created will file form for creation of charge. The person is entitled to recover from the company the amount of fees.

FORM TO BE SUBMITTED FOR REGISTRATION/MODIFICATION OF CHARGE

CHG-1: REGISTRATION AND MODIFICATION OF CHARGE (Other than debenture)

CHG-9: REGISTRATION AND MODIFICATION OF CHARGE (For debenture)

Normal Fees:

Indian Company Having Share Capital Indian Company Not Having Share Capital In Case of Foreign Company
Nominal Share Capital Fee applicable  

 

 

Rupees 200

 

 

 

 

Rupees 6,000

 

Less than 1,00,000 Rupees 200
1,00,000 to 4,99,999 Rupees 300
5,00,000 to 24,99,999 Rupees 400
25,00,000 to 99,99,999 Rupees 500
1,00,00,000 or more Rupees 600

 Additional fees

Period of delay

 

Small Companies and One Person Company

 

Other than Small Companies and One Person Company

 

Up to 30 days

 

3 times normal fee

 

6 times normal fee

 

More than 30 days and up to 90 days

 

3 times of normal fees plus an ad valorem fee of 0.025 per cent. of the amount secured by the charge, subject to the maximum of rupees 1 lakh

 

6 times pf normal fees, plus an ad valorem fee of 0.05 per cent. of the amount secured by the charge, subject to the maximum of rupees 5 lakhs

 

TIME LIMIT:

S.No. Particulars Time Period Days Fees
1. Registration/

Modification of Charge

Within 30 days of Creation or Modification 0 days to 30 Days

(0+30)

Normal fees

(As stated Above)

 

2. If not filed within 30 days Within 60 days of Creation /Modification 0 to 60 Days

(0+30+30)

Normal Fees+ Additional fees
3. If not filed within 60 days Registrar may, on an application, allow such registration to be made within a further period of sixty days 0 to 120 days

(0+30+30+60)

Normal Fees+ Additional fees+ Advalorem Fees
4. After above time limit, there is no way to create/modification of charge and No condonation available under Companies Act after 02.11.2018.

The application after 30 days of creation and modification of charge shall be supported by a declaration from the company signed by its company secretary or a director that such belated filing shall not adversely affect the rights of any other intervening creditors of the company.

CHG-4: SATISFACTION OF CHARGE

Section 82

(1) A company shall give intimation to the Registrar in the prescribed form, of the payment or satisfaction in full of any charge registered under this Chapter within a period of 30 days from the date of such payment or satisfaction and the provisions of sub-section.

Rule 8 (1)

For the purposes of sub-section (1) of section 82, a company shall within 30 days from the date of the payment or satisfaction in full of any charge registered under Chapter VI, give intimation of the same to the Registrar in e-Form CHG-4 along with the fee.

S.No. Particulars Time Period Days Fees
1. Satisfaction of Charge with
ROC
Within 30 days of Satisfaction 0 days to 30 Days

(0+30)

Normal fees

(As stated Above)

 

2. If fails to file within 30 days Within 300 days of Satisfaction 0 to 300 Days

(0+30+270)

Normal Fees+ Additional fees
3. If fails to file within 300 days Filing of form with RD for satisfaction of Charge After 300 days Normal Fees+ Additional fees+ Condonation Fees

 CHG-8: Form No. CHG-8 is required to file with Central Government for extension of time for filing particulars of registration of creation / modification / satisfaction of charge OR for rectification of omission or misstatement of any particular in respect of creation/ modification/ satisfaction of charge.

The Central Government may on an application filed in Form No. CHG-8 in accordance with section 87-

(a) Direct rectification of the omission or misstatement of any particulars, in any filing, previously recorded with the Registrar with respect to any charge or modification thereof, or with respect to any memorandum of satisfaction or other entry made in pursuance of section 82 or section 83,

(b) Direct extension of time for satisfaction of charge, if such filing is not made within a period of three hundred days from the date of such payment or satisfaction.”

Author : CS VIKASH JAIN
Email :  csvikashjain@gmail.com

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