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Home » Private Limited Company » Creation of charge and Filling of form CHG-1

Creation of Charge and filling of Form CHG-1

Sec 77 and sec 87 of the Companies Act, 2013 deals with charges. “Charge” is defined as-

“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. Charge is created on assets of the Company and such assets are defined in Schedule III of the Companies Act, 2013. All companies need to file CHG 1 for creation of Charge with ROC with in Due date. In this article we explained about Charge creation & Procedure to Filing CHG-1

Two types of loans for Charge Creation

Secured Loans granted by banks and Financial institutions against security of assets by the Company.
Unsecured loans taken from directors of the Company.

Thus when a company borrows secured loan from any financial institution like banks in lieu of mortgage of Assets of the Company like pledging of shares or any property of company whether movable or immovable then the same shall needs to be intimated to Registrar of Companies (ROC). The Company shall intimate to ROC within 30 days from the date of creation of Charge.

Due date for Filing CHG-1

Form CHG-1 shall be filed within 30 days from the date of creation of charge.

Procedure for Filling of form CHG-1 with ROC

The ROC shall modified form CHG-1 wef 1^st August, 2019. New forms can be accessed from www.mca.gov.in then go to MCA Services, Download Company forms. Below is detail procedure for Filing of Form CHG 1 with ROC for Charge Creation.

Step 1: Conduct Board Meeting

When any company borrows secured loan from any bank or financial institutions, a board meeting needs to be conducted by directors of Company for Intimating the same to ROC within 30 days from the date of creation of charge.

Step 2: Filling of Form form CHG-1

Form CHG-1 needs to be filed with ROC along with following documents-

Documents for form CHG-1

Instruments of creation or modification of charges such as Sanction letter or Loan agreement

Particulars of all joint charge holders

Contents of Form CHG-1

Following information is required to be filled in form CHG-1

CIN of the Company (Corporate Identification Number)
Charge ID (Only in case of a modification of charge)
Nature, description and brief particulars of the instruments creating or modifying the charge
Details of whether the charge created in India or outside
Type of charge
Details of charge holders such as Category, Name, Address, Email ID and PAN
Amount secured by the charge as per the instrument of charge
Detailed particulars of the principal terms and conditions and extent and operation of the charge
Rate of interest
Repayment term in moths
Terms of repayment
Nature of facility
Date of disbursement
Margin
Extent and operation of the charge
Particulars of the property charged

Fees Details for CHG-1

The fees for creation of Charge CHG-1 are provided as per the companies (Registration of offices and Fees) Rules, 2014

I. Fees for Companies Having Share Capital

Nominal Share Capital	Fees applicable
Less than 1,00,000	Rs 200
1,00,000 to 4,99,999	Rs 300
5,00,000 to 24,99,999	Rs 400
25,00,000 to 99,99,999	Rs 500
1,00,00,000 or more	Rs 600

II. Fees for Company not having Share Capital

In case company not having a share capital, the fee for intimating the Creation or Modification of Charge by the company to the Registrar is Rs.200 per document.

Additional Fees

Period of Delay	Fees Applicable
Up to 30 days	2 times of normal fee
More than 30 days and up to 60 days	4 times of normal fee
More than 60 days and up to 90 days	6 times of normal fee
More than 90 days and up to 180 days	10 times of normal fee
More than 180 days	12 times of normal fee

Condonation of Delay for creation of Charge

Where any charge form CHG-1 is not filled within 300 days (30 days Plus 270 days as per sec 441 of the Companies Act, 2013) from the date of its creation or modification the Registrar shall not register the same unless the delay is condoned by the Central Government. Without Condonation of delay charge cannot be registered with ROC.