Charge Forms
What are Charge Forms?
Charge forms are used to register or modify a charge (security interest) created by a company on its assets with the Registrar of Companies (ROC). This ensures that the charge is legally recognized and enforceable.
Types of Charges:
- Fixed Charge: Secured against specific assets of the company.
- Floating Charge: Secured against a class of assets that can change over time.
Forms to be Filed:
- Form CHG-1: For creation or modification of a charge on assets.
- Form CHG-9: For registering a charge on movable property not being a pledge.
Process of Charge Registration:
- Prepare Charge Documents: Prepare necessary documents related to the charge creation or modification.
- File with ROC: Submit the charge form along with the charge documents to the ROC.
- ROC Verification: ROC verifies the submission and registers the charge.
- Charge Certificate: Upon successful registration, a certificate of charge is issued.
Advantages of Charge Registration:
- Legal Protection: Provides legal protection to lenders and creditors in case of default.
- Transparency: Ensures that all charges on assets are publicly disclosed.
- Enforceability: Validates the charge and enforces rights over the secured assets.
Documents Required:
- Charge Registration Form (CHG-1/CHG-9): Completed and signed form.
- Charge Agreement: Agreement detailing the terms and conditions of the charge.
- Board Resolution: Resolution passed by the board authorizing the creation or modification of the charge.
- Proof of Creation: Evidence of the charge being created or modified, such as loan agreements.