Form CHG-1: Charge Registration Complete Guide
Form CHG-1 is a mandatory filing required under Section 77 of the Companies Act, 2013, for registering charges created by a company with the Registrar of Companies (ROC). A 'charge' refers to any interest or lien created on the company's assets or properties as security for loans or debentures. This registration ensures transparency and protects the interests of creditors and stakeholders.
The registration of charges is a critical compliance requirement that affects a company's creditworthiness and legal standing. Unregistered charges may not be enforceable against liquidators or creditors, making timely filing essential for protecting lender interests.
Understanding Charges Under Companies Act
Types of Charges Requiring Registration
Mortgage
Transfer of interest in immovable property as security for loans. Includes both legal and equitable mortgages.
Hypothecation
Charge on movable assets (stock, vehicles, machinery) where possession remains with the borrower.
Pledge
Security interest where physical possession of goods is transferred to the lender.
Lien
Right to retain possession of property until debt is paid. Can be general or particular.
Legal Framework and Timeline
Governing Provisions
- Section 77: Registration of charges
- Section 78: Duty to register
- Section 79: Verification of charges
- Section 80: Register of charges
- Rule 3: Companies (Registration of Charges) Rules, 2014
Critical Timeline
- Primary Due Date: Within 30 days of charge creation
- Additional Fee Period: Days 31-300
- Compounding Required: Beyond 300 days
- Late Fee: ₹1,000 per day (no cap)
Step-by-Step Filing Process
Execute Charge Document
Prepare and execute the charge instrument (mortgage deed, hypothecation agreement, etc.) with proper stamp duty payment. The instrument must be duly signed by both parties.
Board Authorization
Convene a Board Meeting to approve the creation of charge and authorize filing of CHG-1. Pass a board resolution documenting the approval.
Prepare CHG-1
Access MCA portal, download/launch Form CHG-1. Fill in CIN, charge holder details, charge type, amount secured, property details, and terms of charge.
Attach Documents
Upload original/modified charge instrument, board resolution, proof of stamp duty, property documents, and certificate from charge holder. Documents must be legible and complete.
Digital Signature and Submission
Sign with director DSC. Pay government fees based on charge amount. Submit form and note SRN for tracking. ROC will verify and allot Charge Identification Number (CIN).
Document Requirements
Primary Documents
- ☐ Original charge instrument
- ☐ Proof of stamp duty payment
- ☐ Board Resolution authorizing charge
- ☐ Certificate from charge holder
- ☐ Property documents (if applicable)
Supporting Documents
- ☐ Details of assets charged
- ☐ Previous sanction letters
- ☐ NOC from existing charge holders (if pari passu)
- ☐ Valuation report (if required)
- ☐ Search report (for property charges)
Fee Structure
| Charge Amount | Fee (₹) |
|---|---|
| Less than ₹1,00,000 | ₹200 |
| ₹1,00,000 - ₹5,00,000 | ₹300 |
| ₹5,00,001 - ₹10,00,000 | ₹500 |
| ₹10,00,001 - ₹25,00,000 | ₹1,000 |
| ₹25,00,001 - ₹1,00,00,000 | ₹2,000 |
| Above ₹1,00,00,000 | ₹6,000 |
Stamp duty varies by state (0.1% to 0.5% of charge amount). Some states have fixed rates.
Penalty for Non-Registration
Non-registration or delayed registration of charges attracts severe penalties and legal consequences.
Monetary Penalty
- • ₹1,000 per day of delay (no cap)
- • Company: Up to ₹10,00,000
- • Officer: Up to ₹5,00,000
Legal Consequences
- • Charge not enforceable against liquidator
- • Priority over unsecured creditors lost
- • May affect credit rating
Modification and Satisfaction
CHG-1 for Modification
Any modification to existing charge terms (increase in amount, change in property, rate of interest changes) also requires filing CHG-1 within 30 days. Same fee structure applies.
CHG-4 for Satisfaction
When the charge is fully paid off, file Form CHG-4 within 30 days of satisfaction. Requires certificate from charge holder confirming full payment.
Best Practices for Charge Management
Documentation
- ✓ Maintain register of charges (Form CHG-7)
- ✓ Keep copies of all charge instruments
- ✓ Track charge expiry dates
- ✓ Document all modifications
Compliance
- ✓ File within 30 days of creation
- ✓ Pay correct stamp duty
- ✓ Update ROC records promptly
- ✓ File satisfaction (CHG-4) on payment