FREE LAW NOTES ON CHARGES FROM JAIIB LRAB STUDY MATERIAL 2022 | REGISTRATION AND SATISFACTION OF CHARGES FOR JAIIB EXAM 2022
Read the minor details of Registration & Satisfaction of Charges from prescribed JAIIB’s LRAB Syllabus for JAIIB Exam 2022.
This article has been written for the candidates who are going to appear in the June 2022 exams of JAIIB. We have tried to explain the concept of registration and satisfaction of charges (taken from the applicable syllabus of LRAB 2022). It contains the types of charges, which are the charges which are required to be registered and the provisions relating to their registration.
FREE LEGAL NOTES FOR JAIIB EXAM 2022
REGISTRATION AND SATISFACTION OF CHARGES
What do you mean by charge?
Charge is an interest-only on which is especially created on the property or assets of a company or its or other person’s undertakings as security. It may also include a mortgage.
What are the kinds of charges?
As per the Companies Act, charges have been classified into two types:
- Fixed charge: It is also sometimes called a specific charge which can be extended to some specific property or properties of a company.
- Floating charge: It refers to the security interest over a fund which keeps on changing. Example: Current assets of a company or a legal person.
It is different from a fixed charge as floating charge is created over property which has shifting nature while the fixed charge is on a definite property.
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What kind of charges are required to be registered and by whom?
Every company is an application to distribute charges that have been created within 30 days of creation of Charge:
- On its property or assets, whether its own or any of its undertakings
- Whether tangible or intangible
- Whether within or outside India
What if a company fails to register the charge within 30 days?
If a company does not register the charge within 30 days of its creation, it can still register a charge in 30 days by the payment of additional fees.
But if it still does not register the charge with the ROC (registrar of Companies), ROC can allow on receipt of an application to register it within next 60 days on payment of prescribed fees.
When can a person (in whose favour the charge is to be created) register the charge?
If a company fails to register the charge within 30 days from its creation, the person in whose favour the charge is required to be created – can apply to ROC for its registration along with the charging instrument within 14 days of giving notice to the company. ROC will allow the registration on payment of fees unless the company itself has given sufficient cause as to why the charge should not be registered.
It has been further provided that if the charge has been registered by the person in whose favour the charge was required to be registered, such person can recover the number of fees, including additional fees paid by him or her to the ROC for this purpose.
What is the effect of registering a charge?
When a charge is registered with ROC, issue a certificate of registration to the company or to the person in whose favour it has been created.
What are the mandatory conditions for the registration of charge?
A company is required to register the charge on its property under the following conditions:
- When a company acquires a property which is a subject to a charge
- When there is any modification in the terms and conditions relating to the charge.
What are the things that should be taken into account when registering a charge?
Registration of charges and recorded in a register by the Registrar of Companies. This register is always open for inspection by any person on payment of fees.
PROVISIONS OF LAW RELATING TO REGISTRATION OF CHARGES
|1||Section 77||Meaning of charge||This section provides that ‘charge’ means and includes mortgage/charge over any or all properties of the company within or outside India.|
|2||Section 77(1)||Time for the creation of charge||This section provides that the charge created over the company properties shall be registered with the Registrar of Companies within 30 Days from charge creation.|
|3||Section 77(2)||Certification of charge||This section provides that the ROC shall give a certificate under his hand of the Registration of any charge which he or she registers, stating the amounts thereby secured.|
|4||Section 78||Company does not a register the charge||This section provides that in case the charges are not registered by the Company, the charge holder may apply for registration of charge in the prescribed manner within 14 Days after giving the Company a notice of the same.|
|5||Section 79||Declaration of charges||This section provides that if a company acquires a property which already has a charge under Section 77, then it shall declare the same by filling the particulars of the property, so acquired, subject to charge with ROC.|
|6||Section 80||Deemed notice of charges||This section provides that after registration of charge created, any other person acquiring such property charged or any party thereof, shall be deemed to have notice of the registered charge and shall note the property subject to such charge.|
|7||Section 82||Intimation of satisfaction of charges||This section provides that the Company shall intimate the Registrar of any payment/satisfaction in full of any charge registered within a period of 30 days.|
|8||Section 83||Power to make entries of satisfaction||Power of Registrar to Make Entries of Satisfaction and Release in Absence of Intimation from Company.|
|9||Section 84||Notice of the appointment of receiver||This section provides that in case an order for appointment of receiver or manager is obtained by any person, then such person is required to give notice of such appointment of receiver or manager within 30 days from the order date.|
|10||Section 85||Register of charges||This section requires the company is required to maintain at its registered office, a register of charges in prescribed form & manner.|
|11||Section 86||Contravention||This section provides that contravention of any of the aforesaid provisions shall be punishable with a fine Rs 1,00,000.00 to Rs 10,00,000.00 and every officer in default – be punishable with imprisonment for a term < or = 6 months.|
|12||Section 86||Extension of time for registration||This section provides that the Central Govt. may direct that the time to file any charge may be extended if it is satisfied of a few conditions which have been mentioned in the section.|
List of Forms Related to Charges
|1.||CHG-1||An application to register (other than debentures) the creation or modification of a charge|
|2.||CHG-2||Certificate of registration of charge|
|3.||CHG-3||Certificate of modification of charge|
|4.||CHG-4||Notice to the Registrar regarding particulars for the satisfaction of charge|
|5.||CHG-5||Certificate of registration of satisfaction of the charge|
|6.||CHG-6||Information regarding the appointment or cessation of a receiver or a manager|
|7.||CHG-7||The charge creation, modification, and satisfaction register of the company|
|8.||CHG-8||Application to the Central Government requesting an extension of time to file registration documents of creation or modification or satisfaction of charge as well as rectification any omission or misstatement of any details|
|9.||CHG-9||Request to register the creation or modification of charge for debentures including its rectification|
So, this was all about charges, and their registration in some of the forms which are required to be submitted in the various procedures of charges.
We do hope you understood the concept of charges and would have found it useful. If you did so, do let us know in the comment box because that keeps us motivated to keep posting such short notes for the JAIIB candidates who are preparing for JAIIB Exam 2022.