Everything- Latest Provisions Charge Creation / Modification - Series 454
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 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.
MCA has divided Additional fees
in two Parts on basis of dates: For the charges created or modified on or after the 2nd November, 2018
The following additional fees or advalorem fees, as
the case may be, shall be payable up to 31st
July, 2019, by all companies:-
S. No.
|
Period of delay
|
Additional/Advalorem Fees applicable
|
1.
|
Up to 30 days
|
2 times of normal fees
|
2.
|
More than 30 days and
up to 60 days
|
4 times of normal fees
|
3.
|
More than 60 days and up
to 90 days
|
6 times of normal fees
|
The following additional fees or advalorem fees as
the case may be, shall be payable with effect from 1st August, 2019
S. No.
|
Period of delay
|
Small Companies and One
Person Company
|
Other than Small Companies
and One Person Company
|
1.
|
Up to 30 days
|
3 times of normal fees
|
6 times of normal fees
|
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
MCA has divided Additional fees
in two Parts on basis of dates: For the charges created or modified on or after the 2nd November, 2018
The following additional fees or advalorem fees, as
the case may be, shall be payable up to 31st
July, 2019, by all companies:-
S. No.
|
Period of delay
|
Additional/Advalorem Fees applicable
|
1.
|
Up to 30 days
|
2 times of normal fees
|
2.
|
More than 30 days and
up to 60 days
|
4 times of normal fees
|
3.
|
More than 60 days and up
to 90 days
|
6 times of normal fees
|
The following additional fees or advalorem fees as
the case may be, shall be payable with effect from 1st August, 2019
S. No.
|
Period of delay
|
Small Companies and One
Person Company
|
Other than Small Companies
and One Person Company
|
1.
|
More than 30 days and up
to 90 days
|
3 times of normal fees
plus an ad-valorem fee of
0.025 per cent. of the amount secured by the charge, subject to the maximum
of one lakh rupees
|
6 times of normal fees,
plus an ad valorem fee of 0.05 per cent. of the amount secured by the
charge, subject to the maximum of five lakh rupees”.
|
Quick Bites:
CHARGE CREATED/MODIFIED BEFORE ORDINANCE
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, i.e.
01st May, 2019 on payment of such additional fees as may be
prescribed and different fees may be prescribed for different classes of
companies.
FEES:
charges created or modified before the 2nd November,
2018, and allowed to be filed within a period of three hundred days of such
creation or six months from the 2nd November, 2018, as the case may be, the
following additional fees shall be payable:-
S. No.
|
Period of delay
|
Additional Fee applicable
|
1.
|
Up to 30 days
|
2 times of normal fees
|
2.
|
More than 30 days and up to 60 days
|
4 times of normal fees
|
3.
|
More than 60 days and up to 90 days
|
6 times of normal fees
|
4.
|
More than 90 days and up to 180 days
|
10 times of normal fees
|
5.
|
More than 180 day
|
12 times of normal fees
|
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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