FINANCIAL STRUCTURE AND MEMBERSHIP – IV - CREATION AND REGISTRATION OF CHARGE

FINANCIAL STRUCTURE AND MEMBERSHIP – IV - CREATION AND REGISTRATION OF CHARGE

Where property, both existing and future, is agreed to be available as a security for the repayment of Debt and Creditors have a present right to have it made available, there is a Charge

Kinds of Charge

1. Fixed or Specific Charge – Against security of certain specific property.
2. Floating Charge - property cover of fluctuating type like Stock –in –trade.

A floating Charge remains afloat until a winding up commences, unless it has been crystalized through the intervention of the debenture holders or creditors.

  - Section 124

Invalidity of Floating Charge – Section 534

Where a company is being wound-up, a floating charge on the undertaking or property of the company created within the twelve months immediately preceding the commencement of the winding up, shall, unless it is proved that the company immediately after the creation of the charge was solvent, be invalid.

Registration of Charges – Section 125

Requires a company to file, within 30 days after the date of the creditors of a charge, with the Registrar complete particulars together with the instrument creating, evidencing or modifying the Charge.

Registration of charges on properties acquired subject to charge - Section 127

Where a company acquires any property which is subject to a charge of any such kind as would, if it had been created by the company after the acquisition of the property, have been required to be registered under this Part, the company shall cause the prescribed particulars of the charge, together with a certified copy of the instrument, by which the charge was created or is evidenced, to be delivered to the Registrar for registration in the manner required by this Act within thirty days after the date on which the acquisition is completed:

Particulars to be filed with Registrar in case of series of Debentures – Section 128

File within 30 days with Registrar the total amount secured by whole series.

Company’s Register of Charge – Section 143

Registrar’s Register of Charge – Section 130

Company to report satisfaction and procedure thereafter - Section 138

The company shall give intimation to the Registrar of the payment or satisfaction, in full, of any charge relating to the company and requiring registration under this Part, within thirty days from the date of such payment or satisfaction.

The Registrar shall, on receipt of such intimation, cause a notice to be sent to the holder of the charge calling upon him to show cause within a time (not exceeding fourteen days) specified in such notice, why payment or satisfaction should not be recorded as intimated to the Registrar.

If no cause is shown, the Registrar shall order that a memorandum of satisfaction shall be entered in the register of charges. and if  cause is shown, the Registrar shall record a note to that effect in the register, and shall inform the company that he has done so.

Satisfaction of Charge – Section 140

Where the Registrar enters a memorandum of satisfaction in whole or in part, in pursuance of section 138 or 139, he shall furnish the company with a copy of the memorandum.

Modification of Charge – Section 135

Intimate to Registrar any modification in terms and conditions or extent or operation within 30 days.