Procedure for Creation of Charge

Procedure-for-Creation-of-Charge

As per the provisions of  section 77 of the Companies Act, 2013 It shall be the duty 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, to register the particulars of the charge signed by the company and the charge-holder together with the instruments, if any, creating such charge in such form, on payment of such fees and in such manner as may be prescribed, with the Registrar within thirty days of its creation:

Provided that the Registrar may, on an application by the company, allow such registration to be made within a period of three hundred days of such creation on payment of such additional fees as may be prescribed:

Procedure for Creation of Charge

1.      Issue Notice of Board Meeting for Creation of charge to all the directors.
2.  Convene a Board Meeting and pass Board Resolution. Where a Special Resolution is passed in accordance with Section 180 of the Companies Act, 2013, Form MGT-14 is required to be filed with the Registrar.
3.  For Creation / modification of charge file particulars of the charge with the Registrar of Companies within 30 days in Form CHG-1 or CHG-9 (For debentures)
Particulars of Charge
(a) Corporate Identity Number or foreign company Registration no. of Company
(b) Name of the Company
(c) Address of registered office of Company
(d) Email id of company
(e) Applicants name
(f) Type of charge
(g) Date of instrument of creating / modifying charge
(h) Detail of charge holder i.e. Name,address,city,etc
(i) Amount secured by charge etc.
Documents to be attached
(a) Every instrument evidencing creation/ Modification  of charge
(b) Optional attachments(Resolution)

4.  If the Particulars of charge cannot be filed within 30 days due to unavoidable reasons, then it may be filed within three hundred days (30+ 270days ) of such creation after payment of additional fees as prescribed  in the Companies (Registration offices and fees) Rules , 2014
5. Application for the abovementioned delay shall be made in Form CHG-10 to the Registrar along with a declaration by the company that such belated filing shall not adversely affect the rights of any other intervening creditors of the company.
6. Where a charge is registered with the Registrar, certificate of registration is obtained in Form CHG-2 and in case of Modification of charge obtain certificate for modification of charge in Form CHG-3
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