Registration of Charge under the Companies Act, 2013
CHAPTER
VI OF THE COMPANIES ACT 2013 (part-1)
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. sec 2(16)
REGISTRATION OF CHARGE
Let’s discuss the provision
under the Companies Act 2013 and Companies (Registration of Charge) Rules,
2014:
77. Duty to register charges,
etc.
78. Application for registration
of charge.
79. Section 77 to apply in
certain matters.
80. Date of notice of charge.
81. Register of charges to be
kept by Registrar.
82.
Company to report satisfaction of charge.
83.
Power of Registrar to make entries of
satisfaction and release in the absence of intimation from the company.
84.
Intimation of appointment of receiver or
manager.
85.
Company‘s register of charges.
86.
Punishment for contravention.
87. Rectification by Central Government in
register of charges.
Section
77: Duty to register charges, etc.
(1) It
shall be the duty to register the particulars of the charge signed by the
Company and the charge-holder together with the instruments, 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,
- creating such charge in Form CHG-9 (for debenture) or
- Form CHG-1 (other than Debenture) on payment of such fees,
- with the ROC within 30 days of its creation.
If, such a charge is not registered within 30 days??
On an application by the company (Rule-4), the ROC may allow such
registration to be made:
(a)
within a period of 300
days of such creation,
in case of charges created before the commencement of the Companies (Amendment)
Ordinance, 2019 ( Repealed by the Companies (Amendment) Act,2019) i.e. before
2nd Nov 2018;
·
if
the registration is not made within the period specified above:
§ the registration of the charge
shall be made within
6 months from the date of commencement of the Companies (Amendment) Ordinance, 2019, on payment of such additional fees as may be prescribed and different fees may
be prescribed for different classes of companies;
or
(b)
within a period of 60
days of such creation,
in case of charges created on or after the commencement of the Companies
(Amendment) Ordinance, 2019 i.e. on or after 2nd Nov 2018, on
payment of such additional fees as
may be prescribed:
·
if
the registration is not made within the period specified above:
§ On an application by Company, the ROC may allow such
registration to be made within a further period of 60 days after
payment of such advalorem fees as may be prescribed.
Rule 4: Application to ROC (Registrar).
(1)
the ROC may, on being satisfied that the company had sufficient cause for not filing
the particulars and instrument of charge, if any, within a period of thirty days of the date of creation of the
charge including modification thereto, allow
the registration of the same after
thirty days but within the period as specified in the said provisos, on
payment of fee, additional fee or advalorem fee, as may be applicable, as
prescribed in the Companies
(Registration Offices and Fees) Rules, 2014.
(2)
The application under rule 4(1)
shall be made in Form No.CHG-1 and Form
No.CHG-9 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.
Provided also that any subsequent registration of a
charge shall not prejudice any right
acquired in respect of any property
before the charge is actually registered.
Provided also that this section shall not apply to such charges
as may be prescribed in consultation with the Reserve Bank of India.
Certificate of registration:
(2) Where a charge is
registered with the ROC u/s 77(1), he shall issue a certificate of registration of such charge in Form No.CHG-2 and in such manner as may be prescribed to the company and, as the
case may be, to the person in whose favour the charge is created.
Rule 6:
Certificate of Registration.
(1) Where a
charge is registered with the Registrar under sub-section (1) of section 77 or
section 78, he shall issue a certificate of registration of such charge in Form No.CHG-2.
(2) Where the particulars of
modification of charge is registered under section 79, the Registrar
shall issue a certificate of
modification of charge in Form No. CHG-3.
(3) The certificate issued by the ROC under rule
6(1) and rule 6(2) shall be conclusive evidence that
the requirements of Chapter VI of
the Act and the rules made
thereunder as to registration of creation or modification of charge, as the
case may be, have
been complied with.
Effect of Non-registration of charge:
(3) Notwithstanding anything contained in any other law for the time being in
force, charge created by a company shall
not be taken into account by the liquidator or any other creditor unless it is duly registered u/s 77(1) and a certificate of
registration of such charge is given by the ROC u/s 77(2).
(4) But section 77(3) shall not prejudice
any contract or obligation for the repayment of
the money secured by a charge.
Annexure: Table of Fees
(Pursuant
to rule 12 of the Companies (Registration of Offices and Fees) Rules, 2014)
Fees
for filing charge documents.
(a)
charges
created or modified before the 2nd November 2018, and allowed to be
filed within a period of three hundred days of such creation or six months from
the 2nd November 2018, as the case may be, the following additional fees shall
be payable:-
Sl.No.
|
Period of delay
|
Additional Fee applicable
|
1.
|
Up to 30 days
|
2 times of normal fees
|
2.
|
More than 30 days and up to 60 days
|
4 times of normal fees
|
3.
|
More than 60 days and up to 90 days
|
6 times of normal fees
|
4.
|
More
than 90 days and up to 180 days
|
10
times of normal fees
|
5.
|
More
than 180 days
|
12
times of normal fees
|
(b)
For
the charges created or modified on or
after the 2nd November 2018:-
A.
The
following additional fees or ad Valorem fees, as the case may be, shall be payable up to 31st
July 2019, by all companies:-
Sl.No.
|
Period
of delay
|
Additional/Advalorem
Fees applicable
|
1.
|
Up
to 30 days
|
2 times of
normal fees
|
2.
|
More
than 30 days and up to 60 days
|
4 times of
normal fees
|
3.
|
More
than 60 days and up to 90 days
|
6 times of
normal fees
|
B.
The following additional fees or ad Valorem fees as
the case may be, shall be payable with effect from 1st August 2019:-
Sl.No.
|
Period
of delay
|
Small Companies
and One Person Company
|
Other
than Small Companies and One Person Company
|
1.
|
Up
to 30 days
|
3 times of normal fees
|
6 times
of normal fees
|
2.
|
More than 30 days and up to 90 days
|
3 times
of normal fees +
an ad valorem fee of 0.025 % of
the amount secured by the charge,
subject to the maximum of 1 lakh
rupees.
|
6 times
of normal fees
+
an ad valorem fee of 0.05 % of the amount secured by the charge, subject
to the maximum of 5 lakh rupees.
|
Note: MCA has issued a general circular (circular no.
11/2020) dated 24th of March 2020 with respect to Special Measures
under Companies Act, 2013 (CA-2013) and Limited Liability Partnership Act, 2008
in view of COVID-19 (coronavirus) outbreak which states that:
No additional fees shall be charged for late filing during a moratorium period from 01st April to 30th September 2020, in respect of any document, return, statement
etc., required to be filed in the MCA-21 Registry, irrespective of its due
date, which will not only reduce the compliance burden, including financial burden
of Companies/
LLPs at large, but also enable long-standing, non-compliant companies/ LLPs to make a 'fresh start'. The Circulars specifying detailed requirements in
this regard are being issued separately.
Section 78: Application for registration of charge
The person in whose favour the charge is created may apply
to the ROC for registration of the
charge along with the instrument created for the charge, within such time and
in Form CHG-1/ CHG-9 and manner as
may be prescribed, without prejudice to Company’s liability in respect of any
offence under this Chapter, where a
company fails to register the charge within the period specified in
section 77 and
The ROC may allow such
registration on payment of such prescribed fees, 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:
Provided that where registration is affected on
application of the person in whose favour 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 ROC for the purpose of registration of
charge.
Section 79: Section 77 to apply in
certain matters
The provisions of
section 77 relating to registration of charges shall, so far as may be, apply
to—
(a)
a company acquiring any property subject
to a charge within the meaning of
that section; or
(b)
any modification in the terms or conditions or the extent or operation
of any charge registered under that section.
Section 80: Date
of notice of charge
Where any charge on any property or assets of a company or
any of its undertakings is registered u/s 77, any person acquiring such
property, assets, undertakings or part thereof or any share or interest therein
shall be deemed to have notice of
the charge from
the date of such registration.
Section 81: Register of charges to be kept by Registrar
(1) The ROC shall, in
respect of every company, keep a register containing particulars of the charges
registered under this Chapter in such form and in such manner as may be prescribed.
(2) A register kept in
pursuance of this section shall be open
to inspection by any person on
payment of such fees as may be prescribed for each inspection.
Rule 7: Register of Charges to
be kept by the Registrar
(1)
The particulars of charges
maintained on the MCA portal (www.mca.gov.in/MCA21) shall be deemed to be the register of charges for the purposes of section 81 of the Act.
(2) The register shall be open to inspection
by any person on payment of fee.
For the remaining Section of this chapter VI which are on the satisfaction of charge and penalty provisions will be posted in the next post for easy understanding, so you are requested to read next part of this chapter.
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