Skip to content

CS Executive · Company Law and Practice · Charges

Registered with the Registrar is a charge of Meghna Foods Ltd. The company and bank agree to extend the charge to cover additional stock. Which treatment is correct under the Companies Act, 2013?

The modification must be registered, because section 79 applies the registration requirements of section 77, so far as may be, to any change in the terms, conditions, extent or operation of a registered charge. Extending cover to additional stock changes its extent.

  1. AThe registration provisions of section 77 apply, as far as may be, to this modification of the extent of the chargeCorrect
  2. BNo filing is needed because the charge is already registered
  3. CThe Registrar must treat the original charge as satisfied
  4. DOnly a fresh board resolution is needed and nothing is filed with the Registrar

Explanation

Section 79(b) applies the registration provisions of section 77 to any modification in the terms, conditions, extent or operation of a registered charge. Extending the charge to more stock changes its extent, so the modification must be registered. Treating the existing registration as enough ignores section 79.

Did you get it right without looking?

One question tells you little. A timed set on Charges shows your real accuracy, how long you take and where you lose marks.

Practise ChargesFree diagnostic mock

More Charges questions