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CA Intermediate · Corporate and Other Laws · Registration of Charges

Vihaan Textiles Ltd. took a term loan from a bank and created a mortgage on its factory land in favour of the bank on 1 March. The company wants to know who is primarily responsible for filing particulars of the charge with the Registrar under the Companies Act, 2013. Which statement is correct?

The company creating the charge has the primary duty to file particulars with the Registrar within the prescribed period. The charge holder may also file if the company fails, but it is not the sole responsible party. Neither the Registrar nor the auditor files it.

  1. AOnly the charge holder (bank) must file, and the company has no role
  2. BThe company must file the particulars, though the charge holder may also file if the company does notCorrect
  3. COnly the Registrar files it suo motu on receiving the loan sanction letter
  4. DThe company's statutory auditor must file it with the Registrar

Explanation

Under the Act, it is the company's duty to register a charge created on its property by filing particulars with the Registrar within the prescribed time. The charge holder is also allowed to file if the company fails to do so, but the primary duty lies with the company. So the option saying only the bank files is wrong.

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