query on charge

hiii ekta.

no, i dont think that the associate company should file form 8  as the loan is taken by the company and only guarantee is given on their behalf

 I think that associates companies need not to  file form 8 for creation of charge because associates company have given only collateral security. for collateral security form 8 is not to be file

Dear Ms. Ekta

Does the associate company has given any of its properties as security as for the loan of your company. Please see sec 125 to check whether do assocaite company fall in any of category on which charge is requiredto be registered. Merely giving Corporate gauranttee doesnot mean that a charge is created by the associate company.

if the mortgage is created on the assets of Associated Company, it has also to file form 8 for creation of Charge. And provisions of section 372A also become applicable.

Section 125 of the Companies Act, 1956 deals with the kinds of Charges which are required to be registered with Registrar of Companies and Companies are under obligation to file the charges and prescribed particulars of charge together with instrument, by which charge is created or evidenced, within thirty days after the date of its creation.

The Registrar of Companies is bound to register the charge under Section 132 of the Companies Act, 1956. The associate company as above has neither provided any security nor there is any instrument evidencing charge on any property relating to Corporate Guarantee.

Therefore, furnishing of mere Corporate Guarantee for another body corporate is not registerable, meaning thereby that the corporate guarantee cannot appear in the records maintained by the Registrar of Companies. While I am parting with the opinion, if the banker insist on filing form 8 by the associate companies on security basis, form 8 may be filed . 

Filing of Form 8 regading Corporate guarantee is not mandatory on the part of Associate Companies but the amount of Corporate Guarantee shall be accounted for under Section 372 A (in case of Public Cos.)

CASE: associate companies need not file form 8

Dear All,

Let me confirm that the associate companies are providing for collateral security by the creation of mortgage on their properties. 

Then in that case the associate Companies must file form 8 since creation of mortgage on the properties are registrable under Section 132 of the Companies Act, 1956.

Dear friend

If the mortgage is created on the assets of Associated Company, it has also to file form 8 for creation of Charge.otherwise I think you have no requirement for filing form 8 for associates company.

regard

CS NITIN

A charge has been created on the assets of the  associate company by way of mortgage and hence it has to file form 8.  However, form 8 is not required for corporate guarantee.

When the associate company has given gurantee and bank has increased the loan amount on that gurnatee  in the modification of chagre  than definately form : 8 must be filed.

Dear Frnds,

Originally posted by : Basab
	Originally posted by :vaibhavshukla " As per the requirements of the Companies Act, Form 8 is required to be filed when a charge is created on the assets of a company. The essence of this is to Register the said charge. In case of Corporate Guarantee, though there is no charge on any specific asset, there definitely is a floating charge on the assets of the issuer of the Corporate Guarantee. It is thus not optional, but mandatory to file Form 8. References may be drawn from several English case laws in this subject, "

CAN YOU GIVE THOSE CASE LAWS ??