Charge Registration

The Companies Act requires registration of most charges made by companies with the Companies Registration Office (CRO) within a specified period. Failure to register renders the charge void against the liquidator and creditors, though still valid between debtor and creditor, undermining its purpose. The Act offers two registration procedures: a single-stage and a two-stage process, with non-registration resulting in automatic debt due.

Registration requirements encompass various charges, from debentures to land interests, with charges on book debts and other assets falling within the ambit. Priority in charge registration aligns with creation order or registration date, offering protection against competing claims. Registration, mandatory within 21 days, ensures clarity on the charges held against a company’s assets, with late registration possible under certain conditions.

Judgment mortgages, though subject to registration, pose distinct requirements, now enforced on the creditor rather than the company. The CRO maintains a register of charges, open for public inspection, while companies must maintain internal registers of charges and debenture holders, accessible to creditors and members. Non-compliance with registration obligations constitutes an offence, underscoring the significance of adhering to regulatory requirements.

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