File Your Income Tax Return Before 31st July 2024.
- What is a charge?
Section 2(16) of the Companies Act, 2013, defines the term ‘charge’as an interest or lien that is created on the property or assets of a company or it may be created on any of its undertakings or securities including a mortgage. In simple terms, it may be said that a charge is created when a company puts forward its assets as security on any amounts loaned to it. - Why charge is created?
The purpose of creating a charge is that the financial institutions/ banks have security for the loans that are provided to the companies, the security is provided through creating a charge on assets of the company that are registered with the Registrar. - By whom and which charge is to be registered?
The company that is established within or outside India has to register a charge on its property or assets or any of its undertakings that may be tangible or intangible within thirty (30) days of the creation of the Charge. - What if a company fails to register the charge within 30 days?
The company or the charge holder may apply for the creation or modification of the charge if the company fails to register the same within thirty (30) days with the registrar. The Registration after receiving an application for seeking an extension, he shall ask for providing the reason of delay in registration and within fourteen (14) days of sending such notice register the charge. - What is the effect of registration of charge?
Once a charge is registered by the company or the charge holder with the Registrar, he shall issue a certificate of registration to the company or the charge holder in whose favor the charge is created. - When registration of Charge is mandatory other than on its Creation?
It is mandatory when-- A company acquires any property subject to a charge; or
- Any modification is there in the terms/ conditions/ operation of any charge registered.
- Where CHG-7 shall be maintained?
It shall be maintained by the company at its registered office and it shall be kept open for inspection by members, creditors (no fees be charged) and the details shall also be maintained at the Ministry of Corporate Affairs (MCA) website. - What is the procedure for modification of a charge?
Procedure is almost similar as of creation of charge, once the modification of charge is filed, the Registrar shall issue a certification (CHG-3). - What do we mean by ‘satisfaction of charges’?
Every company must inform the ROC in form CHG-4 about the payment or satisfaction (in full) of any charge registered before the Registrar within thirty (30) days from the date of such payment - What if the charge is partially satisfied?
Form- In such a case Form-CHG 4 shall not be filed and Form- CHG 1 has to be filed to create a modification in the existing charge. However, on the application filed by the company or the charger holder, the Registrar may allow a further time of two seventy (270) days after the expiry of 30 days on payment of additional fees. - What is the punishment for contravention of Section 86 of the Companies Act, 2013?
If the company contravenes Section 86 of the Act, then it shall be liable to pay a penalty of Rs. 5 Lakhs. The defaulting officer shall be liable to pay a penalty of Rs. 50,000/. Any person will fully furnishing false information or knowingly suppressing any material information shall be liable for action under Section 447 of the Act. - What are the relevant forms related to charges?
Name of Forms Particulars CHG 1 Creating or modifying charges (excluding debentures) CHG 2 Certificate of registration of charge CHG 3 Certificate of modification of charge CHG 4 Intimation to the Registrar of the satisfaction of charge CHG 5 Certificate of registration of satisfaction of the charge CHG 6 Notice of appointment or cessation (Receiver/ Manager) CHG 7 Register of creation of charges, modification of charge, and satisfaction of charge by the company CHG 8 Application to Central Government for seeking time extension to file details of registration of creation/ modification/ satisfaction of charge also about the rectification of any omission or misstatement concerning any details CHG 9 Application for registration of the creation or modification of charge (for debentures inclusive of rectification) CHG-10 Form for application for delay to the registrar
