New Norms- Charge Creation/ Modification- Series 403
New Norms- Charge
Creation/ Modification
Companies Act, 2013 & Company (Amendment) Ordinance, 2018
Creation/ modification
of charge are one of crucial activity for Loan from Bank/ financial
institutions etc. When Companies Act,
2013 introduced at that time Charge satisfaction form required to be submitted
with ROC within 30 days of satisfaction otherwise Company have to file
application of compounding with Regional Director. However, by Companies
Amendment Act, 2017 this limit of 30 days increased up to 300 days as balanced
with Creation/ modification of Charge.
However,
Companies (Amendment) Ordinance, 2018 have changed the period for Creation/
Modification of Charge with tighter time based norms;
Section Involved: Section 77 Duty
to Register Charge
i.
BEFORE ORDINANCE: As
per Section 77 of Companies Act, 2013, Company have to create charge with the
Registrar within 30 days of creation of Charge.
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:
Condonation: Provided further that
if registration is not made within a period of three hundred days of such
creation, “the company shall seek extension of time in accordance with section
87”
ii.
AFTER ORDINANCE: As
per Section 77 of Companies Act, 2013, Company have to create charge with the
Registrar within 30 days of creation of Charge.
Provided that the Registrar may, on an application by the company,
allow such registration to be made within a period of Sixty Days of such creation on payment of such
additional fees as may be prescribed
In place of Condonation: Provided further that if the registration is not
made within the period specified—
The Registrar may, on an
application, allow such registration to be made within a further period of Sixty Days after payment of such ADVALOREM fees as may be
prescribed
Quick Bites:
i. If Charge is created before date of Ordinance i.e. 02.11.2018 in such
case filling shall be according to new provisions or old provisions?
As per Act before ordinance or after ordinance both
states that company shall file form for registration of charge within 30 days of
creation.
In case company fails to file the same within 30 days of Registration and date of creation of charge is
before 02.11.2018 in that case:
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.
Provided further that if the registration is not made within the period
specified i.e. 300 days from such creation then the registration of the charge
shall be made within six months from the date of commencement of the Companies
(Amendment) Ordinance, 2018, on payment of such additional fees as may be prescribed
and different fees may be prescribed for different classes of companies.
Note: Thus, one can opine that as per ordinance there is no way
for Condonation for creation/ modification of charge under companies act after
02.11.2018.
After
02.11.2018 form can be file as per prescribed time with such additional fees
plus ADVALOREM as
may be prescribed.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
ii.
If Charge is created after date of Ordinance i.e. 02.11.2018 in such
case what shall be time period for filing of form for registration of charge
with ROC.
If charge
is created after 02.11.2018 in such case following shall be period for filing
of charge form with ROC.
STAGE
|
PARTICULAR
|
TIME PERIOD
|
Days
|
FEES
|
i.
|
Registration of Charge with
ROC
|
Within 30 days of Creation
|
0+30
|
Normal Fees
|
ii.
|
If Fails to file with in 30,
days
|
within a period of 60 days of such creation
|
0+30+30
=
60
|
Normal
Fees +
Additional Fees |
iii.
|
If Fails to file with in 60,
days
|
Registrar may, on an application, allow such
registration to be made within a further period of sixty days
|
0+30+30+60
= 120
|
Normal Fees +
Additional Fees +
Advalorem Fees
|
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
iii. As per question no. II if company fails to file form for creation/
modification of charge within 120 days of creation of charge. In such case
whether company can file application for Condonation to Regional Director u/s
87.
As
per Ordinance, 2018 there is modification in Section 87 of Companies Act, 2018.
Before Ordinance
|
After Ordinance
|
The Central
Government on being satisfied
that—
(i) (a) the
omission to file with the Registrar the particulars of any charge created
by a company or
any charge subject to which any property has been acquired by a company or
any modification of such charge; or
|
The Central Government on
being satisfied that —
(a) the omission to give intimation to the
Registrar of the payment or satisfaction of a charge, within the time
required under this Chapter; or
|
Note: After ordinance i.e. 02.11.2018 clause relating to Condonation
of delay in creation/ modification of charge has been removed from Section 87.
Thus, one can opine that as per question no. II if company
fails to file e-form CH-1 for creation / modification of charge within 120 from
creation of charge then there is no way under Companies act for filing of such
form with ROC.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
iv. If Charge is satisfied before/ after date of Ordinance i.e. 02.11.2018
in such case what shall be time period for filing of form for satisfaction of
charge of charge with ROC.
If charge
is satisfied even before or after 02.11.2018 in such case following shall be
period for filing of e-form CHG-4 for satisfaction of charge with ROC.
STAGE
|
PARTICULAR
|
TIME PERIOD
|
Days
|
FEES
|
i.
|
Satisfaction of Charge with
ROC
|
Within 30 days of Satisfaction
|
0+30
= 30
|
Normal Fees
|
ii.
|
If Fails to file with in 30,
days
|
within a period of 300 days of such satisfaction
|
0+30+270
= 300
|
Normal
Fees +
Additional Fees |
iii.
|
If Fails to file with in 300,
days
|
Filing of form with RD for satisfaction of Charge
|
0+30+270+----
= ------
|
Normal Fees +
Additional Fees +
Condonation fees
|
Note: Provisions for Condonation of delay in satisfaction of
charge is still there in act even after ordinance.
Author – CS Divesh
Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi
and can be contacted at csdiveshgoyal@gmail.com). Disclaimer: The entire
contents of this document have been prepared on the basis of relevant
provisions and as per the information existing at the time of the preparation.
Although care has been taken to ensure the accuracy, completeness and
reliability of the information provided, I assume no responsibility therefore.
Users of this information are expected to refer to the relevant existing
provisions of applicable Laws. The user of the information agrees that the
information is not a professional advice and is subject to change without
notice. I assume no responsibility for the consequences of use of such
information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT,
SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION
WITH THE USE OF THE INFORMATION
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