Creation of charge

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Querist : Anonymous

Querist : Anonymous (Querist)

13 June 2013 A Public Ltd co wants to take loan from bank against book debts. What is thr procedure for creation of charge in this case.What form needs to be submitted with ROC and by what time. In case charge is created but the equirement for loan changes what is the procedue for dissolving the charge already created.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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14 June 2013 Form -8 has to be e-filed with in 30 days after the date of creation of the charge. However, 30 more days extension is allowed with payment of additional filing fee. For full details requested to refer section 125 of the Companies Act,1956.

Ajay Mishra

Ajay Mishra (Expert)
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14 June 2013 Hi

If a charge created by the company falls within any of the classes as specified in section 125 (4), its particulars shall be filed with the Registrar of Companies Act, 1956 within 30 days of creation of charge. If particulars of charge could not be filed within 30 days, the ROC has power to extend the said period by 30 more days subject to payment of additional filing fee by the Company.
Particulars of creation of charge shall be filed in Form No. 8 & 13, in 3 sets, along with all the papers / instruments relating to creation of charge. Form No. 8 includes the following details :

· Description of instrument creating the charge
· Amount secured
· Property charged
· Terms & conditions of charge
· Name & address of person entitled to charge

Registrar of Companies (ROC) will verify the particulars filed under Form No. 8 & 13 and thereafter shall register charge which is conclusive evidence of compliance with the requirements as to registration of the charge. ROC shall deliver 2 sets duly registered under seal and signature, one for lender and second for borrower.

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