Registration of a Charge

Posted on 17-04-2016        By ADMIN

Registration of a Charge companies act 2013 cs notes

When parties agree that property shall be made available as security for the payment of debt in a transaction for value, this is termed as that charge is created. 

The term charge has been defined in clause 2(16) of the Companies Act, 2013 as an interest or lien created on the property or assets of a company or any of its undertakings or both as security and includes a mortgage; 

Every company is under an obligation to keep at its registered office a register of charges and enter therein all charges specifically affecting property of the company and all floating charges on the undertaking or any property of the company. 

Punishment for contravention (Section 86) - As per section 86 of the Companies Act, 2013, if a company makes any default with respect to the registration of charges covered under Chapter VI, there penalty shall be levied, ranging from 1 lakh to 10 lakhs. 

Every defaulting officer is punishable with imprisonment for a term not exceeding 6 months or fine which shall not be less than 25,000 rupees, but not exceeding 1 lakh rupees or both. 

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