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Chg-1 for letter of guarantee


Viswanath Reddy   18 January 2020

Viswanath Reddy

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Bank has sanctioned guarantee for an amount of rs.50 lacs and cc limit for rs.650 lacs.


for what amount chg-1 to be filed??

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Jatin Bajaj (CS)     18 January 2020

Jatin Bajaj
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As per section 77 of the Companies Act 2013, charge needs to be created on each and every assets of the Company. If the bank has given the guarantee amount of 50 laks and CC Limit is of Rs. 6.5 crore, then charge is to be created on 6.5 crores only as 50 lakhs is FD which is being hold by the bank and the charge is filed in Form CHG 1 within 30 days of creation of charge.

Sanjay (Company Secretary)     18 January 2020

Sanjay
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it should be 700 lacs. Is the charge created over the property of Company?

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Viswanath Reddy   20 January 2020

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@ sanjay , in my opinion the charge is to be created for only Rs 650 lacs, becoz the company has given hypothecation only on Book debts. But for guarantee, only Fixed deposit of company will be held under lien..

Sanjay (Company Secretary)     20 January 2020

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@ Viswanath, FD is also an asset of the Company, when the same is being taken into lien it become a charge created by the bank on asset of the Company. Hence CHG should be for entire amount. 


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