What are the statutory provisions for registration of charges?
John Hall
Updated on February 18, 2026
The registration of charges is given in Section 77(1), Section 78 and Section 79 of the Companies Act. The particulars of a charge together with a copy of the instrument creating or modifying the charge must be filed with the Registrar of Companies.
What are the provisions of Companies Act 1956?
3.2. 1 The Companies Act, 1956 empowers the Central Government to inspect the books of accounts of a company, to direct special audit, to order investigation into the affairs of a company and to launch prosecution for violation of the Companies Act, 1956.
What are the provisions of charges?
Section 80 provides that where any charge on any property or assets of a company or any of its undertakings is registered under Section 77, any person acquiring such property, assets, undertakings or part thereof or any share or interest therein shall be deemed to have notice of the charge from the date of such …
What is the procedure for registration of company?
A Step-By-Step Guide To Company Registration Process In India
- 1) Apply For Director Identification Number (DIN)
- 2) Apply For Digital Signature Certificate (DSC)
- 3) Filing For New User Registration.
- 4) Filing for Charter Documents.
- 5) Application For Company Name.
- 6) Register Other Details.
- 7) Acquiring PAN and TAN.
What instrument creates charge?
Instrument(s) evidencing creation or modification of charge. in case of acquisition of property which is already subject. to charge together with the instrument evidencing such. acquisitions.
Is registration of charge mandatory?
Registration of Charge Every company, creating or modifying a Charge on its property, assets or undertakings, whether it is tangible or intangible situated within or outside India, shall register the particular of Charge with the Registrar within 30 days of such creation by applying Form No.
What are the objectives of Companies Act 1956?
Main objectives of Company law are:
- To protect the interest of shareholders.
- To safeguard interest of creditors.
- To help the development of companies in India on healthy lines.
- To help the attainment of ultimate ends of the social and economic policy of the government.
What is the difference between Companies Act 1956 and 2013?
In Companies Act 1956, only public financial institution, public sector banks or scheduled bank with main object of financing were allowed to issue there shelf prospectus but now Companies Act 2013 provides that the government shall prescribe the types of companies that can issue shelf prospectus.
What is crystallisation of a floating charge?
Crystallization is the process by which a floating charge converts into a fixed charge. If a company fails to repay the loan or enters liquidation, the floating charge becomes crystallized or frozen into a fixed charge.
Is an unregistered charge void?
The unregistered charge per se is not void against the liquidator or other creditors. However the liquidator is not required to consider the same. Status of unregistered charge is still valid as per other applicable laws like Transfer of Properties Act, 1881.
How do you create charges?
Types of Charges Creation of Companies act 2013 For Creation of Charge, Form CHG-1 is required to be filed with the Registrar of Companies within 30 days of its creation. The Form is required to be signed by the Company and the Charge-holder and should be filed together with the instrument creating a charge.
What happens if a charge is not registered?
Consequences of non-registration of charges Section 77 of Companies Act 2013 states that in case a company fails to register the charge with the registrar of companies for registration the same shall be void against the liquidator and the creditor of the company.
What if a charge is not registered?
If the charge is not registered within the prescribed time limit then horrible potential consequences will apply. The company will remain liable for the repayment of the debt; but in effect the security lender is exposed because the charge is unsecured.
What is the main purpose of companies Act?
In India, the Companies Act, 1956, is the most important piece of legislation that empowers the Central Government to regulate the formation, financing, functioning and winding up of companies. The Act contains the mechanism regarding organizational, financial, and managerial, all the relevant aspects of a company.
What is the purpose of the Companies Act 2013?
The Companies Act 2013 is an Act of the Parliament of India on Indian company law which regulates incorporation of a company, responsibilities of a company, directors, dissolution of a company.
What are the changes in Companies Act 2013?
Major Changes brought by the. Companies Act, 2013.
What causes the crystallisation of a floating charge?
If a company fails to repay the loan or enters liquidation, the floating charge becomes crystallized or frozen into a fixed charge. Crystallization can also happen if a company ends operations or if the borrower and lender go to court and the court appoints a receiver.
How is a floating charge created?
A floating charge is a security interest over a fund of changing assets of a company or other legal person. Unlike a fixed charge, which is created over ascertained and definite property, a floating charge is created over property of an ambulatory and shifting nature, such as receivables and stock.
