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CA Intermediate · Corporate and Other Laws · Registration of Charges

Ganga Polymers Ltd issued a series of debentures to the public, with all debenture holders ranking equally under one charge on its factory. The company now asks how this charge should be registered. Which statement is correct?

For a series of debentures ranking equally under one charge, the company files a single set of particulars with the Registrar. These cover the total amount secured and the debenture trustees. Individual debenture holders need not register separately, and debenture charges are registrable regardless of the type of property.

  1. AEach debenture holder must register a separate charge
  2. BThe company registers the charge once for the whole series, filing the particulars with the Registrar including the total amount secured and the trustees' detailsCorrect
  3. CDebenture charges need not be registered with the Registrar
  4. DRegistration is only needed if the debentures are secured by movable property

Explanation

Where a series of debentures carries equal rights under a single charge, one set of particulars is filed for the whole series, covering the total amount secured and the debenture trustees. Separate filing per holder is unnecessary. Charges securing debentures are specifically registrable, whether on movable or immovable property, so the last two options are incorrect.

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