REGISTRATION/MODIFICATION OF CHARGES

  • A charge is an interest or lien created on the property or assets of the company as security.
  • Every company obtaining any secured loan from banks and financial institutions are required to register their charges with the Registrar of Companies.
  • A creation of charge is when a company obtains any loan from the banks or financial institutions in lieu of the assets or property of the company.
  • A modification of charge is when a company want to enhance the existing limit of loan or want to change any terms or conditions in the existing loan of the company.
  • A satisfaction of charge is when a company has repaid the whole amount of loan along with interest and charges and the company received a No Dues certificate from the bank or financial institution.

Process of Registration of Creation and Modification of Charges:

  • Pass board resolution for obtaining or enhancing the existing loan from bank or financial institution.
  • After the loan is sanctioned, obtain the relevant documents from the bank like sanction letter, deed , etc.
  • File Form CHG-1 with the Registrar of Companies within 30 days from the date of execution of such deed.

Process of Registration of Satisfaction of Charges:

  • Get a No dues Certificate from the Bank or Financial Institution after repayment of the loan.
  • Pass a Board Resolution for satisfaction of charge.
  • File Form CHG-4 with the Registrar of Companies within 30 days from the date of receipt of no dues certificate.

Registration of charges is very crucial for any company, if a company fails to comply with any of the provisions of registration of charge it may face heavy penalties.

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