Strategic Management and Corporate Finance · Raising of Funds from Debt and Procedural Aspects

Creation and Registration of Charges under Section 77 of the Companies Act

Updated 11 October 2026 · Fact-checked

A **charge** is security a company gives over its property to a lender. Under section 77, the company must register the charge particulars with the Registrar within 30 days of creation. Late filing is allowed with additional fees. An unregistered charge is ignored by a liquidator or other creditors, though the debt stays payable.

Understand Creation and Registration of Charges

When a company borrows, the lender often wants security. The company gives the lender rights over its property or assets. That security interest is a charge. If the company defaults, the lender can enforce the charge and recover dues from the asset.

Charges are of two broad kinds. A fixed charge attaches to a specific, identified asset, such as a factory building or a machine. The company cannot sell that asset freely without the charge-holder's consent. A floating charge hangs over a class of assets that keeps changing, such as stock or book debts. The company can deal with these assets in the ordinary course of business. The charge settles on specific assets (crystallises) only on default or winding up.

Other lenders and the public need to know which assets are already pledged. So the Act requires charges to be registered with the Registrar. Section 77(1) puts the duty on every company creating a charge on its property or assets or any of its undertakings, tangible or otherwise, in or outside India. The particulars must be signed by the company and the charge-holder and filed with the instrument, if any, creating the charge.

The company must also keep its own register of charges at its registered office (section 85). It lists all charges and floating charges. A copy of each instrument is kept with it. Members and creditors can inspect it free. Others can inspect it on payment of the prescribed fee.

The key exam point is the consequence of not registering. Under section 77(3), a liquidator or any other creditor cannot take the charge into account unless it is registered and the Registrar has issued a certificate of registration. Section 77(4) saves the contract: the borrower still owes the money.

Key rules to remember

Time limit for registration (s. 77(1)): Creation of charge + 30 days; Particulars signed by the company and the charge-holder, with the instrument, filed with the Registrar in the prescribed form and fee.
Condonation for charges created on or after the 2019 Amendment (s. 77, first proviso (b)): Day 31 to day 60, on application and additional fees; The Registrar may allow registration within 60 days of creation.
Further extension (s. 77, second proviso (b)): Further 60 days, on application and ad valorem fees; If the 60 days are missed, the Registrar may allow registration within a further period of 60 days after payment of the prescribed ad valorem fees.
Effect of non-registration (s. 77(3), (4)): Unregistered charge is not taken into account by a liquidator or other creditor; the repayment obligation is not prejudiced; Applies to a liquidator appointed under the Act or under the IBC. The charge is not taken into account by the liquidator or other creditor unless it is registered and the Registrar has issued a certificate of registration.
Registration by charge-holder (s. 78): Charge-holder applies; Registrar decides within 14 days after notice to the company; The charge-holder can recover the fees it paid from the company.
Acquisition of property subject to a charge and modification (s. 79): Section 77 applies, so far as may be; Covers a company acquiring property subject to a charge, and any change in the terms, conditions, extent or operation of a registered charge.
Satisfaction of charge (s. 82(1)): Payment or satisfaction in full + 30 days; Registrar may allow intimation within 300 days on application and additional fees. Application may be made by the company or the charge-holder.
Show-cause notice before memorandum of satisfaction (s. 82(2)): Notice to charge-holder, time not exceeding 14 days; Notice is not needed if the intimation is in the specified form and signed by the charge-holder.
Floating charge before winding up (s. 332): Created within 12 months before winding up commences: invalid unless company was solvent immediately after creation; If solvency is not proved, the charge is invalid except for the cash paid to the company at or after creation, in consideration for the charge, plus interest at 5% per annum or the notified rate.

How to solve Creation and Registration of Charges questions

Use this method for any case-based question on charges. Tie each conclusion to the facts given.

1Identify whether a charge exists: has the company given security over its property or assets to a lender? Classify it as fixed or floating.
2Fix the date of creation. All time limits run from this date.
3Check who must file and what: the company must file particulars signed by both parties, with the instrument, in the prescribed form with fees.
4Count the days. Up to 30 days is normal. Days 31 to 60 need an application and additional fees. A further 60 days is possible with ad valorem fees.
5If the company has not registered, check whether the charge-holder can apply under section 78, and note the Registrar's 14-day decision after notice.
6State the consequence of non-registration under section 77(3) and 77(4): the charge is not recognised by the liquidator or other creditors, but the debt is still repayable.
7Cover later events: modification or acquisition of charged property (section 79), and satisfaction of the charge within 30 days (section 82).
8Conclude clearly with the advice, and mention the register of charges kept under section 85.

Quickest way: Date-and-days check

When to use it: Use this when a question gives dates of creation or repayment and asks whether the company has complied or what it can do now.

Write the creation date and add 30 days. That is the normal deadline.
If the filing is later, check day 60 and then day 120 from creation (60 days plus a further 60 days).
For repayment, add 30 days to the date of full payment. The outer limit with additional fees is 300 days.
Write the consequence in one line from section 77(3) and 77(4).
Name the remedy: condonation by the Registrar, application by the charge-holder under section 78, or rectification by the Central Government under section 87.

Common mistakes in Creation and Registration of Charges

Saying the loan becomes unrecoverable if the charge is not registered.
Students read section 77(3) and ignore section 77(4).
Fix: Write that the charge is not taken into account by the liquidator or other creditors, but the contract for repayment is not prejudiced.
Counting the 30 days from the date of the loan agreement or from disbursement.
The question gives several dates and the student picks the wrong one.
Fix: Count from the date of creation of the charge, as stated in section 77(1).
Mixing up the 60-day and 300-day periods.
Both appear in section 77 and section 82.
Fix: Registration of a new charge: 30 days, then 60 days, then a further 60. Satisfaction: 30 days, then 300 days. Remember registration and satisfaction are different tracks.
Believing only the company can get the charge registered.
Section 77 speaks of the company's duty.
Fix: Under section 78 the person in whose favour the charge is created may apply, and can recover the fees from the company.
Treating a floating charge as always valid on liquidation.
Students stop at the definition and skip section 332.
Fix: A floating charge created within 12 months before winding up is invalid unless the company was solvent immediately after creation, except for cash paid to it plus interest.
Forgetting modifications and acquisitions of charged property.
Students focus only on fresh charges.
Fix: Quote section 79: section 77 applies to a company acquiring property subject to a charge and to any modification of a registered charge.

Worked examples

Example 1

Meridian Textiles Ltd mortgaged its factory at Coimbatore to a bank on 1 March to secure a term loan. The charge was created after the commencement of the Companies (Amendment) Act, 2019. The company did not file the charge particulars until 15 April of the same year. Can the charge be taken into account against other creditors, and what must the company have done?

Show the solution

The charge is a fixed charge on a specific asset. It was created on 1 March, so the normal 30-day period under section 77(1) ended on 31 March.
The filing on 15 April was 45 days after creation. It was late, but within 60 days.
The charge was created after the commencement of the Companies (Amendment) Act, 2019. So under the first proviso to section 77(1), the Registrar may allow registration within 60 days on an application by the company and payment of additional fees.
So the company must apply to the Registrar and pay the additional fees. The Registrar may then allow registration.
Once registered, the Registrar issues a certificate of registration under section 77(2). Only then can the liquidator or other creditors take the charge into account under section 77(3).

Answer: The filing was 15 days late but within 60 days. As the charge was created after the 2019 Amendment commenced, the Registrar may allow registration on the company's application and payment of additional fees. After registration and the certificate, the charge is taken into account by the liquidator and other creditors.

Example 2

Kaveri Foods Ltd borrowed ₹5,00,00,000 from a bank against a floating charge on its stock. It did not register the charge. The company is later wound up and the liquidator disputes the bank's security. The bank says the company can still be sued for the money. Advise on both points.

Show the solution

Registration was a duty under section 77(1). The company did not do it, and the bank was also free to apply under section 78.
Under section 77(3), no charge created by a company is taken into account by the liquidator or any other creditor unless it is registered and the Registrar has given a certificate of registration.
This charge is not registered and has no certificate. So the liquidator and other creditors are not bound to take the bank's floating charge into account. The test is registration with a certificate, not whether they knew of the charge.
Section 77(4) says section 77(3) does not prejudice any contract or obligation for repayment of the money secured by a charge.
So the bank's right to be repaid the ₹5,00,00,000 under the loan contract survives. It cannot rely on the unregistered charge against the liquidator or other creditors.
Section 332 is a separate test for floating charges. If this charge was created within 12 months before the winding up began, it is invalid unless the company was solvent immediately after its creation. Even then it would stand only for cash paid to the company in consideration for the charge, plus interest at 5% per annum or the notified rate. The facts do not give the creation date, so flag this check in your answer.

Answer: The liquidator is right that the unregistered charge need not be taken into account under section 77(3). The bank is also right that the repayment obligation survives under section 77(4). It can claim the debt under the loan contract, but it cannot rely on the unregistered charge against the liquidator or other creditors. Separately, section 332 may invalidate the floating charge if it was created within 12 months before winding up and solvency is not proved.

Exam tips

Answer in the order provision, facts, conclusion. Cite section 77 for registration and the consequence, and section 82 for satisfaction.
Draw a short timeline of days from the creation date. Examiners often test whether the filing falls in the 30, 60 or further 60-day window.
Always pair section 77(3) with 77(4). Examiners reward the point that the debt survives.
Mention the company's register of charges under section 85 in compliance-style answers, and who can inspect it.
Keep fixed versus floating charge to two or three lines. Spend more time on procedure and consequences.

Practice questions from Raising of Funds from Debt and Procedural Aspects

Creation and Registration of Charges in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Creation and Registration of Charges: frequently asked questions

What is the time limit to register a charge under section 77?

The company must register the charge particulars within 30 days of its creation. For charges created on or after the commencement of the Companies (Amendment) Act, 2019, the Registrar may allow registration within 60 days with additional fees. After that, a further 60 days may be allowed on payment of ad valorem fees.

What is the difference between a fixed charge and a floating charge?

A fixed charge attaches to a specific asset, which the company cannot freely sell. A floating charge covers a changing class of assets, such as stock, which the company can deal with in the ordinary course until the charge crystallises.

How is satisfaction of a charge recorded?

The company gives intimation to the Registrar of payment or satisfaction in full within 30 days. The Registrar may allow up to 300 days on application and additional fees. The Registrar notifies the charge-holder, who has a stated time of up to 14 days to show cause. If none is shown, a memorandum of satisfaction is entered in the register of charges.

Can the Registrar record satisfaction without the company's intimation?

Yes. Under section 83, the Registrar may enter a memorandum of satisfaction or release on evidence to his satisfaction, even if the company gave no intimation. The affected parties must be informed within 30 days.