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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.
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Due date for Filing CHG-1
Form CHG-1 shall be filed within 30 days from the date of creation of charge.
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Procedure for Filling of form CHG-1 with ROC
The ROC shall modified form CHG-1 wef 1st 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
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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 |
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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.
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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 |
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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.
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