Registration of Charge

Introduction

A charge is a form of security interest created over the assets of a company to secure a loan or performance of an obligation. Under the Companies Act, 2013, companies are required to register charges with the Registrar of Companies (ROC) to ensure public notice of the encumbrance and to secure the rights of lenders and creditors.

Proper registration is essential to ensure that the charge is enforceable against third parties.

Registration of Charge

Statutory Provisions

The provisions relating to registration of charge are primarily covered under:

Section 77 to 87 of the Companies Act, 2013

Companies (Registration of Charges) Rules, 2014

A "charge" includes both:

  • Fixed Charge – created on specific and identifiable assets
  • Floating Charge – created on a class of assets which can change in the ordinary course of business
Charges can be created on:
  • Movable or immovable property
  • Tangible or intangible assets

As per Section 77:

"It is the duty of every company creating a charge to register the charge with the ROC within the prescribed time and manner."

This applies to:

  • Creation of a new charge
  • Modification of existing charge
  • Satisfaction (full repayment) of charge

  • Particulars Time Limit Additional Time Allowed*
  • Registration of charge (Normal) Within 30 days of charge creation Up to +120 days with additional fees
  • Registration of charge (Post-2019 amendment) Within 60 days for charges created on or after 01.08.2019 Additional 60 days (with ad valorem fees)
  • *As per Companies (Amendment) Ordinance, 2019

  • Purpose E-Form
  • Creation/Modification of Charge Form CHG-1 (Other than debentures) / CHG-9 (for debentures)
  • Satisfaction of Charge Form CHG-4
  • Condonation of Delay Form CHG-8 (with RD approval)
  • Memorandum of Satisfaction Form CHG-4

  • The charge becomes void against the liquidator and creditors.
  • The debt remains valid between company and lender, but not enforceable against third parties.
  • Company and officers may be liable for penalties under Section 86.

  • The filing fees depend on the company’s nominal share capital. Additional/ad valorem fees apply for delayed filings.