Skip to content

CA Intermediate · Corporate and Other Laws · Registration of Charges

Sundaram Textiles Ltd. created a charge on its factory land in favour of Canara Bank on 1 April. The charge was not registered within the original 30-day period, and the Registrar has not yet been approached. Which of the following is the correct legal position under the Companies Act, 2013 regarding registration of this charge?

A charge not registered within 30 days can still be registered within 300 days of its creation by paying additional fees, as the Companies Act, 2013 allows a delayed filing window. It does not become void immediately after 30 days, though it remains unprotected against creditors until registered.

  1. AThe charge can never be registered once 30 days have lapsed
  2. BThe charge may be registered within 300 days of creation on payment of additional fees, with the Registrar's permission being unnecessaryCorrect
  3. CThe charge may be registered only by the Tribunal after 30 days
  4. DThe charge is valid without registration against the liquidator and other creditors

Explanation

Under Section 78, if a charge is not registered within 30 days, the Registrar may allow registration within a further 300 days of creation on payment of additional fees. Option A is wrong as late registration is allowed. Option C is wrong since beyond 300 days the Central Government route applies, not the Tribunal. Option D is wrong because an unregistered charge is not taken into account by the liquidator or other creditors.

Did you get it right without looking?

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

Practise Registration of ChargesFree diagnostic mock

More Registration of Charges questions