Register charges created with your company assets

(1) The “Charge” means an lien or interest created on the property or assets of a company or any of its undertakings or both as security and includes a mortgage of their register charges.

Register charges created with your company assets

(2) Please note that the words “lien” and “interest” have to be understood in the context of the word “security” and belong to the same genus as the word “mortgage”.

(3) Please note that registration of a “charge” is compulsory regardless. Whether the charge is created within or outside Chennai, India. The  register charges can undertakings any of its property or assets. Whether tangible or otherwise, and situated in or outside Bangalore, India.

(4)Charges on the properties or undertakings of a company have to be registered. Whether the same area for the purpose of securing debentures issued by the company or for any other purposes. Registration will be required when a charge is created on the uncalled share capital. The calls made, but not paid or book debts or on any movable or immovable property.Whether tangible or intangible properties such as goodwill, copyrights, trademarks, patents or any other intellectual property rights or property or development rights. Whether it is by way of lien or pledge or hypothecation or mortgage or in any manner whatsoever. This registration is mandatory irrespective of the class of property or mode of creation of the charge.

(5)The “Registration of Charges” except Section 86 of the 2013 Act, which contains the penal clause relating to the contravention. If a company had created any charge on its properties prior to 1.4.2014 that are not required to be filed and registered in accordance with the provisions of the Companies Act, 1956. Such particulars need not be filed and registered under the Companies Act, 2013 read with Companies (Registration of Charges) Rules.A period of 30 days has not elapsed from the creation or modification of such a charge. The statutory requirements and consequences contained in Chapter VI will apply only to charges and modifications created/made after the coming into force of this Chapter.

(6) Unlike Section 125 of the 1956 Act, Section 77 of the 2013 Act does not list out the categories of charges registration of which are mandatory.

(7) If you want to register the charge or modification of any charge already created. Register charges with the specific charge or its changes in Form (Registration of Charges).

(8) When the security creation is for the value of debentures, please note that the prescribed Form is different. For operation connecting to the filing of particulars of instruments engaged by register charges.

(9) The time limit for filing the particulars of charge or modification is just 30 (thirty) days from the date of creation or modification of the charge. The stipulations of Section 77 assign to any changes in the terms and conditions. Under the section 77 the extent or operation of any charge registered.

(10)Unlike the Companies Act 1956, under the Companies Act, 2013, there is no special provision or additional time limit for filing the particulars of charges on property situate outside Chennai, India. Under the Companies Act, 1956 read with rule 6 of the companies (Central Government’s) common forms and rules, 1956, in the case of a charge created out of Chennai and comprising solely of property situate outside Bangalore. The particular of the charge could be filed with the Registrar within thirty days after the date on which the instrument creating or evidencing the charge or a copy thereof. It is accomplished with due purpose.The copy of charge have been accepted in Chennai.

   (11) All the electronic Forms [e-Forms] have to be filled up and uploaded in the MCA portal ( Registration of Charges) Rules, 2014. 

(12) As they are e-Form, signing of these forms would have to be done by affixing the digital signature of the persons authorised to sign these forms. The e-Forms must be signed by the company and the charge-holder.

(13) See that the said e-Form is electronically filed and ensure that a copy of the instrument or deed by which the charge is created or evidenced duly verified in the manner explained here under is also filed with the registrar together with the Form as an attachment. The Companies (Registration of Charges) Rules, 2014.

(14 ) A copy of every instrument leading any creation or modification of register charges should be filed with the registrar in pursuance of Section 77, 78 or 79 of the 2013 Act shall be verified as follows-

(a) Where the deed or instrument means only to the property situated outside their registration in Chennai. The copy shall be confirmed by a certificate issued either under the seal. If any of the company or under the hand of company secretary of the company or  any director or an authorised officer of the charge holder or  other than the company who is interested in the register charges or mortgage.

(b) Where the instrument or relates deed. Whether partly or wholly to the property situated in Kochi. The copy shall be verified by a certificate issued under the hand of an authorised officer of the charge holder or any director or company secretary of the company or (Registration of Charges).

(15) Ensure that there is a resolution authorizing the signatory to sign e-Form and such person could either be the director or manager or Chief Executive Officer [CEO] or Chief Financial Officer [CFO] or secretary of the company duly authorized by the board of Directors. Nothing prevents the Managing Director to sign this e-Form as he is also a director. In the case of a foreign company, any authorised representative may sign the e-Form.

(16) If the person signing the e-Form is a director, it is necessary to mention his Director Identification Number [DIN]. In case it is signed by the manager or CEO or CFO authorised representative. It is necessary to mention his Permanent Account Number issued by the Income-tax Department under the Income-tax Act, 1961. In case the e-Form is signing the person is a secretary of the company. It is necessary to mention his/ membership number issued by the Institute of Company Secretaries of India (ICSI).

(17 ) Also ensure that the said e-Form is also digitally signed by the charge holder be  the financial institution or bank or Asset Reconstruction Company [ARC] in terms of Securitization and Reconstruction of Financial Assets and Enforcement of Securities rest Act, 2002 (SARFAESI) or assignee.

(18) Pay the requisite filing fee as per the fees as mentioned in the rules 2014 of companies (Registration Offices and Fees).

(19) The e-Form should be certified by the company auditors. The certifying professional must declare that she has been duly engaged for the purpose of certification of this form and he/she must further state that he/she has gone through the provisions of the Companies Act,13 rules. The form of this subject mattes incidental there . He/she has verified the above particulars containing attachments from the original/certified records preserved by the Company/applicant.Which is the subject matter of this and found them to be true, complete and no information and correct material to this has been suppressed. The company secretary or other certifying professional must or certify that the said records have been properly prepared, signed officers of the company is mandatory. Preserved as per the relevant provisions of the companies 2013 and were found to be in order.

(20) The Registrar will register the “charges”. The registrar publish a certificate of Registration in form.

(21) If the filing is delayed, due to unavoidable circumstances. It can be filed with the additional fees prescribed under the companies rules 14 (Registration Offices and Fees) duly explaining. The reasons for delay and declaring, inter alia, that there are no litigations with respect to the charge. As the case may be the modification of the register charges.

(22) Such a delayed filing is possible. Filed within a period of 300 days of the date of such modification or creation by payment of the prescribed additional fee.

   (23) Please note that a charge created by a company will not be taken into account by the fiduciary or any other creditor. Unless it is duly registered. The Registrar has issued a certificate of registration of such charge. Please note that this provision operates. However, anything to the opposition contained in any other law for the time being in force. Therefore, failure to register a charge will render the security created by way of a charge on the properties or undertakings of a company a mere paper as against the liquidator or any other creditor of the company. This provision will equally apply to modification of charges too.

(24) Please note that any subsequent registration of a charge shall not bias any right assumed in respect of any property. Before the charge is actually registered.

(25) Procedure for making application to the Central Government under Section 87 of the Companies Act, 2013.

(26) When a company gets the charges on its properties registered with the Registrar of Companies. Any person acquiring such property, assets, undertakings or part thereof. Any share or interest therein. It shall be deemed to have notice of the charge from the date of  such registration. This is a beneficial provision and operates as a constructive public notice.

(27)The particulars of charges (satisfaction of charges and modifications to charges ) registered with the registrar of companies. It will constitute the register of charges required to be maintained by the registrar of companies pursuant to section 81 of the act.

(28) A company must enter the particulars of its charges in a registration charges kept and maintained by the Company for this purpose. The register must be in the prescribed form. The procedure for entering particulars in the register charges.

(29) However the amount secured by the charge would remain due and payable and merely. Because the charge is not registered the debt. If any, due to the unregistered charge holder will not become unenforceable. It is only that charge becomes unenforceable and that too if there are other creditors.

(30) Please note that if the company that creates the charge does not file the e-Form and get the charge duly registered. The person in whose approval the charge is created may submit to the registrar for registration. The instrument created with the charge along with for the charge within. The prescribed time and in the prescribed form. In such a case, the registrar will issue a notice to the company and within a period of fourteen days. After sharing notice to the company. But, the company may registers the shows or charge comfortable reason why such charge should not be registered. Permit such registration on payment of the prescribed fees. The additional fees depending upon the delay. If any in such filing.

(31) Please note that if registration is effected on application of the person in whose approval the charge is established. That person shall be authorized to get from the company. The amount of  additional fees or any fees paid by him to the registrar for the purpose of registration of charges.

(32) Please note that apart from filing and getting the registration of charges and modification of charges. Every company should give modification of charges, satisfaction of charges and particulars of register charges in its annual return also. Every company is supposed to prepare and file with the registrar an annual return as per section 92(2) of the companies act 2013.The company must give particulars as at the end of every financial year, members, public financial institutions, its borrowings from its directors, banks and others. The modification, satisfaction, creation of charges in that respect.

(33) Please note that if registration of a charge or its modification has not been done within a period of 300 days of such creation or modification. The company should make an application of the central government. In the case of a charge created out of Chennai and comprising solely of property situate outside Bangalore. It shall seek an extension of time in accordance with section 87 of the 2013 act.