Due Date Of Chg 1
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Due Date Of Chg 1

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Understanding the due date for filing Form CHG-1 is crucial for companies to ensure compliance with the Companies Act, 2013. This form is essential for registering the creation or modification of charges on a company’s assets, providing transparency and legal clarity for both the company and its creditors. Timely filing helps avoid penalties and ensures that the company’s financial obligations are properly recorded.

What Is Form CHG-1?

Form CHG-1 is a statutory document required under Sections 77, 78, and 79 of the Companies Act, 2013. It must be filed with the Registrar of Companies (RoC) to register the creation or modification of a charge on a company’s property or assets. A ‘charge’ refers to an interest or lien created on the company’s assets, typically as security for a loan or debt. This form provides details about the charge, including the nature of the charge, the amount secured, and the parties involved.

Importance of Timely Filing

Filing Form CHG-1 within the prescribed time frame is vital for several reasons

  • Legal ComplianceEnsures adherence to statutory requirements under the Companies Act, 2013.
  • TransparencyProvides public record of the company’s financial obligations, enhancing trust with creditors and investors.
  • Protection of RightsEstablishes the charge holder’s legal rights over the secured assets in case of default.
  • Avoidance of PenaltiesPrevents the imposition of additional fees and legal complications arising from delayed filings.

Due Date for Filing Form CHG-1

According to Rule 3 of the Companies (Registration of Charges) Rules, 2014, Form CHG-1 must be filed within 30 days from the date of creation or modification of the charge. This deadline applies to charges created or modified on or after November 2, 2018. The filing must be done electronically through the Ministry of Corporate Affairs (MCA) portal, and the form should be signed by both the company and the charge holder.

Consequences of Delayed Filing

If Form CHG-1 is not filed within the initial 30-day period, the company or charge holder may still file the form within an extended period, subject to additional fees

  • 31 to 60 DaysAn additional fee of three times the normal filing fee for small companies and One Person Companies (OPCs), and six times the normal fee for other companies.
  • 61 to 90 DaysIn addition to the above, an ad valorem fee of 0.025% of the amount secured by the charge, subject to a maximum of ₹1 lakh for small companies and OPCs, and 0.05% of the amount secured, subject to a maximum of ₹5 lakh for other companies.
  • 91 to 120 DaysThe same additional fees as above apply.
  • Beyond 120 DaysFiling is not permitted without obtaining approval from the Central Government. This involves filing Form CHG-8 and obtaining an order for condonation of delay in Form INC-28, which is a complex and time-consuming process.

Late Fee Structure

The late fee structure for delayed filing is as follows

  • Up to 30 DaysNormal filing fee.
  • 31 to 60 DaysThree times the normal fee for small companies and OPCs; six times the normal fee for other companies.
  • 61 to 90 DaysIn addition to the above, an ad valorem fee of 0.025% of the amount secured by the charge, subject to a maximum of ₹1 lakh for small companies and OPCs; 0.05% of the amount secured, subject to a maximum of ₹5 lakh for other companies.
  • 91 to 120 DaysSame as above.
  • Beyond 120 DaysFiling not permitted without Central Government approval.

Documents Required for Filing Form CHG-1

To file Form CHG-1, the following documents must be attached

  • Instrument of ChargeA copy of the document evidencing the creation or modification of the charge, such as a loan agreement, mortgage deed, or hypothecation agreement.
  • Particulars of Charge HoldersDetails of all parties holding an interest in the charge.
  • Board ResolutionA resolution passed by the company’s board of directors authorizing the creation or modification of the charge and the filing of Form CHG-1.
  • Other Relevant DocumentsAny additional documents required to substantiate the creation or modification of the charge.

Process for Filing Form CHG-1

The process for filing Form CHG-1 involves the following steps

  1. Preparation of DocumentsGather all necessary documents, including the instrument of charge, particulars of charge holders, and board resolution.
  2. Filling Out the FormLog in to the MCA portal and complete Form CHG-1 with the required details.
  3. Digital SignaturesEnsure the form is digitally signed by the authorized signatories of the company and the charge holder.
  4. Payment of FeesPay the applicable filing fee, considering any additional fees for delayed filing.
  5. SubmissionSubmit the completed form and documents through the MCA portal.
  6. AcknowledgmentUpon successful submission, the Registrar of Companies will process the form and issue a Certificate of Registration of Charge (Form CHG-2) or Certificate of Modification of Charge (Form CHG-3), as applicable.

Filing Form CHG-1 within the stipulated 30-day period from the creation or modification of a charge is essential for companies to comply with legal requirements and maintain transparency in their financial dealings. Delays in filing can lead to additional fees and legal complexities. Therefore, companies should ensure timely filing to avoid penalties and ensure that their charges are properly registered and recognized under the Companies Act, 2013.

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