Charge Registration

Procedures and deadlines under the Companies Act are periodically revised. This article is for general information and does not constitute legal advice.

What a Charge Is, and Why Registration Matters

A charge is security a company creates over its assets, property, inventory, receivables, or other collateral, typically in favour of a lender when taking a loan. Under Section 77 of the Companies Act, it must be registered with the ROC through Form CHG-1, within 30 days of creation. An unregistered charge is void against the liquidator and other creditors in an insolvency; the lender still has a valid claim against the borrower personally, but loses the priority and enforceability that registration would have given it over the specific secured asset.

The Extended Window, and What Happens Beyond It

Registration can be extended to 60 days from creation with additional fees, and in specific circumstances condoned even later with the Central Government’s approval, though that route is neither automatic nor guaranteed. Beyond the available extensions, the charge simply can’t be registered at all, leaving the lender’s security effectively unenforceable against third parties.

Satisfaction of Charge

Once the underlying loan is fully repaid, the charge doesn’t automatically disappear from the company’s record. Satisfaction has to be separately filed through Form CHG-4, generally within 30 days of the charge being satisfied. Skipping this step leaves an outdated charge sitting on the company’s record indefinitely, which can complicate due diligence for a future lender, buyer, or investor looking at the company’s asset position.