{"id":5489,"date":"2020-03-27T17:44:06","date_gmt":"2020-03-27T12:14:06","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=5489"},"modified":"2022-09-09T15:03:08","modified_gmt":"2022-09-09T09:33:08","slug":"application-for-registration-of-charge-a-deep-insight","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/application-for-registration-of-charge-a-deep-insight\/","title":{"rendered":"Application For Registration of Charge &#8211; A Deep Insight"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Borrowing funds are an essential reservoir for a corporation to raise funds for financing large-scale projects and extending its business. Corporate borrowings comprise loans obtained by a <a href=\"https:\/\/corpbiz.io\/company-registration\"><strong>registered company<\/strong><\/a> by way of forming a charge on its assets as security to the lender company. As defined in the <strong>Companies Act, 2013<\/strong><sup><a href=\"https:\/\/www.mca.gov.in\/content\/mca\/global\/en\/acts-rules\/ebooks.html\"><strong>[1]<\/strong><\/a><\/sup>, &#8220;charge&#8221; means an interest created on the property of a company or any of its security. According to <strong><em>Section 77(1)<\/em><\/strong> of the Act, it is the obligation of every corporation <strong>creating a charge<\/strong> within or outside the country, on its property or assets.\u00a0 The provisions of Section 77 of the Act relating to registration of charge shall be applicable to a corporation obtaining any property subject to a charge within the meaning of that section. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/application-for-registration-of-charge-a-deep-insight\/#Form_and_Manner_of_Registration_of_Charge\" >Form and Manner of Registration of Charge<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/application-for-registration-of-charge-a-deep-insight\/#Extension_of_Time_for_Registration_of_Charge\" >Extension of Time for Registration of\nCharge<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/application-for-registration-of-charge-a-deep-insight\/#What_is_the_Effect_of_Non-Registration_of_Charge_%E2%80%93_Penalty_Provisions\" >What is the Effect of Non-Registration of\nCharge? \u2013 Penalty Provisions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/application-for-registration-of-charge-a-deep-insight\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Form_and_Manner_of_Registration_of_Charge\"><\/span><strong>Form and Manner of Registration of Charge<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The process of registration of a charge along with the\ninstrument creating a charge, with the Registrar of Companies within the period\nprescribed in Section 77(1) of the Act. <\/p>\n\n\n\n<p>However, in the case of omission to file the particulars within\nthe directed period, the company can get the charge registered by seeking\ncondonation from the Central Government. <\/p>\n\n\n\n<p>This is also known as <strong><em>&#8220;rectification of the register of\ncharges&#8221;<\/em><\/strong>.<\/p>\n\n\n\n<p>The application for registration of charge is to be submitted to\nthe Registrar of Companies in such form as directed in the <strong><em>Companies (Registration of\nCharge) Rules, 2014<\/em><\/strong>.<\/p>\n\n\n\n<p>Under section 77(1), 78 and 79 of the Act, the particulars of the charge shall be filed with the Registrar of Companies <strong><em>within thirty days of the date of creation<\/em><\/strong> along with the fee, in <strong><em>Form No.CHG-1 or Form No.CHG-9 (for debentures)<\/em><\/strong>. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/conversion-of-dormant-company-into-active-company\/\">Conversion of Dormant Company into Active Company\n<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Extension_of_Time_for_Registration_of_Charge\"><\/span><strong>Extension of Time for Registration of\nCharge<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The provision to Section 77(1) supports the extension of time\nfor filing details for registration of charge. It is stated within, that the\nRegistrar of Companies may grant such registration to be made <strong><em>within\nthree hundred days of such creation<\/em><\/strong>. <\/p>\n\n\n\n<p>According to Rule 4, Form No.CHG-1 acts as an application for\nthe delay and supported by a statement from the organisation signed by its\nsecretary or director. <\/p>\n\n\n\n<p>However, if things don&#8217;t go as per law, then the company shall\nseek an extension of time for for the registration of the charge from the\nCentral Government (in eForm CHG-8). The eForm CHG-1 will be concocted by the\nRegistrar of Companies office after the order of Central Government.&nbsp; <\/p>\n\n\n\n<p>The Central Government, on the other hand, can provide the extension\nof time on the ground that the omission to file with the Registrar of\nCompanies.<\/p>\n\n\n\n<p>The petitioners were under the idea that respondents have\nregistered the particulars of charges, but according to Registrar of Companies,\nit was found that the purpose was not filled. However, despite the petitioners\nrequesting the respondents to cause the registration of the charges, the\nrespondents did not affect the registration of the charges, and therefore, the\npetitioners filed the said petition, which, if allowed would not cause\nprejudice to any stakeholder or the respondents, including the creditors. <\/p>\n\n\n\n<p>It was believed that in these situations, the delay in filing of\nthe particulars of the charges be disregarded and time be increased for filing\nsuch particulars. In the said case, the applicants pointed out that the lag was\ndue to a sufficient cause and hence, an extension of time was awarded for\nfiling particulars of the charge.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Effect_of_Non-Registration_of_Charge_%E2%80%93_Penalty_Provisions\"><\/span><strong>What is the Effect of Non-Registration of\nCharge? \u2013 Penalty Provisions<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Section 77(3) of the Act affirms that in case a charge is not\nregistered then the charge shall not be taken into account by any creditor or\nliquidator. Section 86 of the Act provides for penalty for violations of\nSection 77 of the Act.<\/p>\n\n\n\n<p>The company shall be subject to a <strong><em>fine of one lakh to ten lakh\nrupees and every officer of the organisation who is in defaulter shall be\npunishable with imprisonmen<\/em><\/strong>t. <\/p>\n\n\n\n<p>Hence, an application must be delivered for registration of\ncharges to the Registrar of Companies in the designated format so that the\nconcerned authority can issue a certificate of registration of charge and\nentitle the company to rights at the time of liquidation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Conducting a fair business practice in India is not an easy job. There are tons of paperwork that is required that go along with the corporate laws. Hopefully, this article has ramped up your understanding regarding the application for registration of charge. We will keep coming up with informative contents down the line. So stay tuned.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/annual-compliance-of-a-public-limited-company\/\">Annual Compliance of a Public Limited Company: Rules and Procedures<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Borrowing funds are an essential reservoir for a corporation to raise funds for financing large-scale projects and extending its business. Corporate borrowings comprise loans obtained by a registered company by way of forming a charge on its assets as security to the lender company. As defined in the Companies Act, 2013[1], &#8220;charge&#8221; means an interest [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":5503,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[120,340],"tags":[429],"acf":{"service_id":"321"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":6633,"readingTime":3,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/5489"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=5489"}],"version-history":[{"count":17,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/5489\/revisions"}],"predecessor-version":[{"id":48540,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/5489\/revisions\/48540"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/5503"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=5489"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=5489"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=5489"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}