When must a company register a charge?
A company must register a charge on its assets with the Registrar within 30 days of creating it. A charge is a security interest, including a mortgage. It is not a transfer of ownership.
What is a charge?
Section 2(16) covers an interest or lien created on the company’s property or assets, or on any of its undertakings, as security. A mortgage, a hypothecation, and a pledge given to a lender are charges. The asset stays with the company unless the security is enforced.
When is it registered?
Section 77 starts the 30 days on creation. A charge other than on debentures is filed in CHG-1. A charge on debentures is filed in CHG-9. If those 30 days are missed, the Registrar may allow a further 30 days on an additional fee, and then a further 60 days on an ad valorem fee. This page does not quote either fee. A borrowing that is not a deposit is a different return, on the DPT-3 page.
What is not a charge?
An unsecured loan creates no charge to register. A sale of the asset is not a charge. When the debt is paid and the charge is satisfied, the company files CHG-4. The lender’s receipt does not replace that form.
Frequently asked questions
Four questions cover a sale, the extra days, debentures, and satisfaction.
Is a charge a sale of the asset?
No. The company keeps the asset and gives the lender a security interest. Ownership does not pass by the charge.
Is the time limit always 30 days?
The company files within 30 days of creation. The Registrar may allow a further 30 days on an additional fee, and a further 60 days after that on an ad valorem fee. This page does not quote those fees.
Does one form cover debentures?
No. A charge other than on debentures is CHG-1. A charge on debentures is CHG-9.
Does repayment cancel the register entry by itself?
No. Satisfaction of the charge is filed in CHG-4. Paying the lender does not, by itself, remove the entry.
Sources
A charge is section 2(16) of the Companies Act, 2013. Registration is section 77. Satisfaction is section 82.