What we do
Our work in this practice group is structured around the records, deadlines, and decisions involved:
- Assistance with registration of charges created in favour of lenders.
- Review and verification of financing and security documentation.
- Accurate preparation of charge particulars for MCA filing.
- Assistance with Form CHG-1 preparation and filing.
- Coordination support with banks and financial institutions.
- Proper maintenance of company charge records.
- Reduced risk of delay or inconsistency in charge registration.
How the engagement works
Creation and registration of charges are governed primarily by Sections 77 and related provisions of the Companies Act, 2013, together with the applicable Companies (Registration of Charges) Rules and MCA procedures. A company creating a charge on its property, assets, or undertaking is generally required to register the charge with the Registrar within the prescribed period. The applicable form, timeline, fees, additional fees, and documentation depend on the nature of the charge and the circumstances of its creation.
Scenario 1: A company obtains a secured term loan from a bank and provides its property or other assets as security.
Scenario 2: A business receives working capital or other secured finance from a financial institution and needs to register the lender’s charge.
Scenario 3: A company creates a mortgage, hypothecation, or other security interest over its assets in favour of a lender.
Scenario 4: A company wants professional assistance coordinating charge registration with its bank or financial institution.
Scenario 5: A company has created a charge but has not yet completed the applicable MCA registration and needs assistance with regularizing the filing.
Financing & Security Document Review
We review sanction letters, loan agreements, hypothecation agreements, mortgage documents, security documents, and other records to identify the particulars required for charge registration.
Charge Particulars Preparation
We prepare the required details relating to the amount secured, property charged, charge holder, terms of the charge, and other particulars required for the MCA filing.
Lender Coordination
We coordinate with the company, bank, financial institution, or other charge holder for obtaining required information, verification, and documentation.
CHG-1 Preparation
We prepare Form CHG-1 and the applicable supporting documents based on the financing and security arrangements.
MCA Charge Registration
We assist with filing the charge registration form with the Registrar of Companies and maintain the acknowledgement and registration records.
Statutory Record Update
We assist with updating the company’s register of charges and other relevant corporate records after registration of the charge.
Step-by-step process
Step 1: Loan & Security Review
We review the loan or financing arrangement, security documents, assets charged, lender details, and other relevant information.
Step 2: Charge Particulars & Documentation
We identify and compile the particulars required for registration and collect the necessary supporting documents from the company and lender.
Step 3: Form CHG-1 Preparation
We prepare the applicable charge registration form and verify the particulars against the underlying financing and security documents.
Step 4: MCA Filing & Registration
We assist with filing the charge particulars with the Registrar of Companies and coordinate applicable verification or clarification requirements.
Step 5: Record Maintenance
After registration, we maintain the filing acknowledgement and provide guidance on updating the company’s statutory register and records.
Key deliverables & outputs
General questions
01What is a charge on a company’s assets?
A charge is a security interest or lien created over a company’s property, assets, or undertaking in favour of a lender or other secured creditor to secure repayment of a loan or performance of an obligation.
02When does a company need to register a charge?
A company generally needs to register a charge created on its property, assets, or undertaking with the Registrar of Companies within the prescribed statutory period, subject to the applicable Companies Act provisions and rules.
03What is Form CHG-1?
Form CHG-1 is the prescribed MCA form generally used for registration of creation or modification of charges, other than charges relating exclusively to debentures, subject to the applicable rules.
04What documents are required for charge registration?
Documents may include the loan agreement, sanction letter, hypothecation or mortgage documents, security agreement, details of the charged assets, lender information, and other supporting documents required for the applicable MCA filing.
05Who files the charge registration form?
The company is generally responsible for filing the charge registration particulars with the Registrar of Companies. The filing may require verification or certification by the relevant persons or professionals as prescribed under the applicable rules.
06What happens if a charge is not registered on time?
Failure to register a charge within the prescribed period can result in additional fees, statutory consequences, and potential issues concerning enforceability against a liquidator or creditors as provided under the Companies Act. The specific consequences depend on the circumstances and applicable law.
07Can a delayed charge be registered later?
The Companies Act provides mechanisms and additional time or fees for registration of charges in certain circumstances, subject to statutory limits and applicable procedures. A delayed filing should be reviewed promptly.