Creation of charge

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Mohit Batra (Querist)

27 May 2016 Sir/Madam,
I have a query regarding creation of charge. A partnership firm was converted into company. When the concern was partnership firm it has taken loan.
Now my queries are :

1) From which date charge is required to be created ?
2) The limit under section 180 (1) (c) has been exceeded , when the special resolution is required to be passed?

Jatin Bajaj

Jatin Bajaj (Expert)

27 May 2016 Charge can be created from the date of Loan. and according to section 77 of Companies Act 2013, Charge shall be created on every property or assets and Company shall file form CHG 1 within 30 days of creation of Charge.
If the limit specified under section 180(1)(C) has been exceed , the Company shall pass special resolution in general meeting and shall specify the amount upto which money may be borrowed by the Board of Directors.

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Mohit Batra

Mohit Batra (Querist)

28 May 2016 Sir thanks for your reply but what to do in case loan is taken when it was a partnership firm and when resolution is to be passed under section 180 (1) (c). I n normal cases we pass resolution authorising the board to borrow exceeding 100 % of paid capital and free reserves. But what to do when loan is taken by the partnership and then it is converted into the private company.

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