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CS Executive · Company Law and Practice · Charges

Meridian Textiles Ltd mortgages its factory in Surat to a bank on 1 March and wants to rely on the charge against other creditors if the company is wound up. Under the Companies Act, 2013, what is the basic duty of the company in relation to this charge?

The company must register the particulars of the charge, signed by the company and the charge-holder along with the creating instruments, with the Registrar within thirty days of creation. This applies whether the charge or property is in or outside India, so an internal register alone is not enough.

  1. ATo register the particulars of the charge, signed by the company and the charge-holder, with the Registrar within thirty days of its creationCorrect
  2. BTo register the charge with the Registrar only if the property is situated in India
  3. CTo keep the charge details only in the company's own register of charges, with no filing with the Registrar
  4. DTo register the charge within thirty days of the bank disbursing the final instalment of the loan

Explanation

Section 77(1) makes it the company's duty to register particulars of the charge, signed by the company and the charge-holder, with the Registrar within thirty days of creation. The duty applies to charges created within or outside India on property situated in or outside India. Limiting it to Indian property or to the internal register is wrong.

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