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Creation of charge

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Querist : Anonymous

Querist : Anonymous (Querist)

15 August 2016 Sir

I am doing audit of company.
I had found that
company has taken two car on loan and given to his employees for their business purpose in September 2015.
till today company has not created index of charge.

whether Company have to register a index Charge?
As an auditor Shall I have to make any comment in my report?

c.bakshi

c.bakshi (Expert)
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16 August 2016 if any interest or lien created against the property of the company, then it is mandatory for the company to file a charge. however, Charge holder also has a right to create a charge. First check it out whether any security is given by the company or not

Querist : Anonymous

Querist : Anonymous (Querist)

16 August 2016 Company has buy car on loan
so car is consider as security

c.bakshi

c.bakshi (Expert)
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23 September 2016 Yes, Charge should be created by the company. but this is not done. Tell the company to do so by executing a fresh documents because if time limit exceeds 300 days from the date of passing such resolution then penalty imposed on the company and approval from tribunal has to be taken (Central Govt/NCLT)

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