⚖️ Section 77–87 · CHG-1 · CHG-4 · CHG-7 · Companies Act 2013 · MCA Portal

Creation & Modification
of Charge with
ROC — Complete Guide

Every company creating a charge (mortgage, hypothecation, pledge) on its property or assets must register it with the Registrar of Companies (ROC) within 30 days in Form CHG-1. Failure to register makes the charge void against the liquidator and all creditors — your bank loses its security. TAXAJ's CS + CA team handles the complete charge filing, modification, and satisfaction cycle.

30 Days

Registration Window

CHG-1

Creation Form

300 Days

Max Condonation

₹10L

Max Penalty

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✦ Charge Registration — Quick Facts

⚖️

What Requires CHG-1?

Any charge on company property — loan, overdraft, mortgage, debenture

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Filing Deadline

Within 30 days of charge creation — extendable to 300 days

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Forms

CHG-1 (non-debenture) · CHG-9 (debenture) · CHG-4 (satisfaction)

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Who Can File?

Company OR charge holder (bank/lender) can file CHG-1

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ROC Certificate

CHG-2 (creation) · CHG-3 (modification) · CHG-5 (satisfaction)

⚠️

Unregistered Charge

Void against liquidator + creditors on winding up · Unsecured status

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What Is a Charge?

Charge Under Companies Act 2013 — Definition, Types & Legal Framework

Under Section 2(16) of the Companies Act 2013, a "Charge" is defined as an interest or lien created on the property or assets of a company or any of its undertakings or both, as security and includes a mortgage. In plain terms: when a company borrows money from a bank or financial institution, it creates a charge on its assets — this gives the lender a legal right over those assets if the company defaults.

Every company creating a charge on its property within India or outside India — whether tangible or intangible — must register it with the Registrar of Companies (ROC) under Section 77 of the Companies Act 2013. This registration gives public notice to all prospective lenders about the existing encumbrance on the company's assets. Any person intending to lend money can check the MCA portal's Index of Charges to verify whether a company's assets are already charged.

Why Registration is Critical: An unregistered charge is void against the liquidator and any creditor — meaning if the company winds up, the lender with an unregistered charge is treated as an unsecured creditor and loses priority over other creditors. The debt obligation still exists, but the lender loses the security. This makes timely CHG-1 filing critical for both the company and the bank.

What Assets Can Be Charged?

Section 77 covers all types of charges on all types of assets — the scope is intentionally broad:

Immovable property — land, buildings, factory premises
Plant and machinery (movable property)
Book debts and trade receivables
Stocks and inventories (floating charge on current assets)
Intellectual property — trademarks, patents, copyright, goodwill
Shares held in other companies (pledge of securities)
Any other undertaking or asset, present or future
Assets situated outside India (if company is Indian)

Why Banks Insist on Charge Registration

Banks and financial institutions insist on ROC charge registration before disbursing loans because a registered charge creates a public record that the bank has priority over the asset. This registration is valid against third parties — subsequent lenders can check the MCA portal and know that the asset is already charged. Without registration, the bank's interest is at risk in insolvency proceedings under the Insolvency and Bankruptcy Code (IBC) 2016, where only registered charge holders qualify as secured creditors with priority in recovery.

What Happens in Insolvency / Winding Up?

Under the IBC 2016 and the Companies Act 2013, only registered charge holders are recognised as secured financial creditors in insolvency proceedings. Unregistered charge holders are classified as unsecured creditors — they rank after all secured creditors, workmen dues, and government dues in the waterfall of recovery. This is perhaps the single most important consequence of not filing CHG-1 on time. TAXAJ has helped numerous companies regularise missed charge registrations through condonation applications before insolvency proceedings began.

Types of Charges

Types of Charges a Company Can Create

All types of charges must be registered — the type affects the form of registration and the priority of the charge holder in insolvency.

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Fixed / Specific Charge

Created on specific, identifiable assets — land, building, plant and machinery. The company cannot dispose of the charged asset without the lender's consent. In insolvency, fixed charge holders have the highest priority among all creditors.

Examples: Mortgage of land, hypothecation of machinery

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Floating Charge

Created on fluctuating assets — stock-in-trade, book debts, cash. The company can deal with these assets freely in ordinary business course. The charge "crystallises" (becomes fixed) on default or insolvency. Popular for working capital loans and cash credit facilities from banks.

Examples: Hypothecation of stocks, book debts

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Charge on Debentures (CHG-9)

Debentures are debt instruments issued by companies to raise funds. When debentures carry a charge on company assets, the particulars must be filed in Form CHG-9 (not CHG-1). Includes both simple and secured debentures. Common in large corporate borrowings and NCDs.

Form CHG-9 · Debenture trust deed required

💼

Charge on Intellectual Property

Trademarks, patents, copyrights, goodwill, and domain names can be charged as security. Increasingly common for tech startups and IP-heavy companies. The charge instrument must describe the IP clearly, and the ISIN (if listed) must be provided. TAXAJ assists in trademark and IP charge documentation.

Trademarks · Patents · Domain names

🔗

Consortium / Joint Charge

When multiple lenders collectively finance a project (consortium lending), a joint charge is created. All charge holders are mentioned in CHG-1. Each lender's details, amount, and nature of security must be specified. Common in project finance by multiple banks.

Multiple lenders · CHG-1 with all names

🏗️

Charge on Acquired Property

Under Section 79, if a company acquires any property that already has an existing charge on it, that charge must also be registered with the ROC. The acquiring company must file within 30 days of the acquisition date. Failure makes the charge void against the company's liquidator.

Section 79 · Acquisition with existing charge

Choose Your Scenario

Creation · Modification · Satisfaction — What Do You Need?

The procedure and forms differ significantly depending on whether you are creating a new charge, modifying an existing one, or satisfying/closing a charge. Select your scenario.

🆕

Registration of New Charge — Form CHG-1

Section 77 · Within 30 days of creation · CHG-2 certificate issued by ROC

When a company takes a loan from a bank or financial institution and creates a security interest on its assets, it must file Form CHG-1 with the ROC within 30 days of the date of creation of the charge. The "date of creation" is typically the date of the loan agreement or the date on which the security document (mortgage deed, hypothecation agreement) is executed — not the date the money is received in the bank. If the charge relates to debentures, Form CHG-9 must be filed instead of CHG-1. Upon successful filing and registration, the ROC issues Form CHG-2 — the Certificate of Registration of Charge — which is conclusive proof of the charge's existence and validity.

Documents Required — CHG-1

Certified true copy of the charge instrument (loan agreement / mortgage deed)
Details of all charge holders (bank name, address, CIN if applicable)
In case of consortium finance: particulars of all lenders
In case of property acquired with existing charge: acquisition document
List of assets/property charged (description + approximate value)
Board resolution authorising borrowing and charge creation
Director's DSC for filing CHG-1 on MCA V3 portal

Key Details in CHG-1

Date of creation of charge
Nature of charge (fixed / floating / both)
Amount secured by the charge (principal + interest cap)
Description of all assets/property charged
Terms and conditions of the charge
Charge holder's (lender's) full details
Whether charge is within India or outside

✅ TAXAJ handles: CHG-1 preparation and filing within 24 hours of receiving documents. Board resolution drafting for borrowing approval. CHG-7 register update. CHG-2 certificate preservation for company records.

✏️

Modification of Existing Charge — Form CHG-1

Section 79 · Within 30 days of modification · CHG-3 certificate issued

When the terms of an already-registered charge are changed — such as an increase in the loan amount, change in interest rate, extension of security, addition of new assets to the charge, or change in the charge holder (e.g., on loan transfer) — the modification must also be registered with the ROC. Modification of charge is also filed using Form CHG-1 (selecting the "Modification" option), within 30 days of the date of modification. The ROC issues Form CHG-3 — Certificate of Registration of Modification of Charge — upon successful filing. Common scenarios: bank increases working capital limit, NBFC takes over the loan, or additional property is mortgaged.

What Qualifies as Modification?

Increase in loan amount / credit limit
Addition of new assets or properties to the existing charge
Change in interest rate or repayment terms (if affecting security)
Substitution of charge holder (loan transfer / assignment)
Change from floating to fixed charge (crystallisation)
Release of specific assets from the charge

Documents for Modification CHG-1

Certified copy of the modification agreement / supplemental deed
Original CHG-2 certificate (charge ID / SRN)
Details of modified terms (what changed and what remains)
New charge amount / new assets description
Board resolution approving the modification
Director's DSC for MCA V3 filing

⚠️ Common Mistake: Companies often miss filing CHG-1 for modification when the bank simply enhances the credit limit or adds a new property as collateral. Any change in terms that affects the security must be registered within 30 days. TAXAJ monitors outstanding loan agreements to flag modification events before the deadline.

✅

Satisfaction of Charge — Form CHG-4

Section 82 · Within 30 days of satisfaction · ROC issues CHG-5

When a company repays the loan in full and the charge is discharged by the lender, it must intimate the ROC in Form CHG-4 within 30 days of the date of full satisfaction (or partial release). The ROC will then issue a notice to the charge holder asking for confirmation within 14 days. If no objection is received, the ROC records the memorandum of satisfaction and issues Form CHG-5 — Certificate of Registration of Satisfaction of Charge. This is important to ensure the company's MCA profile shows no outstanding charges — which matters for future borrowing, investor due diligence, and credit rating.

Documents for CHG-4

No-Objection Certificate (NOC) from the charge holder (bank / lender)
Original CHG-2 certificate / Charge ID on MCA
Date and proof of repayment / full satisfaction
If signed by charge holder — no separate notice required from ROC
Board resolution acknowledging satisfaction of charge
Director's DSC for MCA V3 filing

After Satisfaction — Clean Up

Update CHG-7 Register of Charges at company's registered office
Ensure MCA portal shows charge as "Satisfied" (verify after CHG-5 issued)
Update statutory registers to reflect closure
Bank should return original title deeds / security documents
For mortgage: execute deed of reconveyance / release deed

✅ Why This Matters: If satisfaction is not filed, the MCA portal still shows the charge as active — this affects future loan eligibility, due diligence by investors and buyers, and the company's credit profile. TAXAJ regularly assists companies filing CHG-4 for loans repaid years ago but never intimated to ROC.

⏰

Late Filing — Condonation of Delay (CHG-8)

Section 77 · 30-day normal + up to 300 days condonation · Beyond that: CHG-8 to Regional Director

If the 30-day normal deadline for CHG-1 is missed, the Companies Act provides condonation mechanisms. For charges created after the Companies (Amendment) Ordinance, 2019 (2nd January 2019): the ROC may condone delay up to 60 additional days (total 90 days from creation). Beyond 300 days, an application must be made to the Regional Director in Form CHG-8, accompanied by a declaration from the company's Director or CS that the delay will not adversely impact the rights of any creditors. If the Regional Director is satisfied, they grant extension and the company files CHG-1 after paying additional fees. For charges created before 2nd January 2019: condonation was possible up to 300 days with additional fees.

Condonation Timeline (Post-Jan 2019)

Days 1–30: Normal filing — standard MCA fee
Days 31–60: Late filing — additional fee + CHG-10 (affidavit that delay won't affect creditors)
Days 61–300: Apply to ROC with CHG-10 + additional fee
Beyond 300 days: CHG-8 to Regional Director + penalty
Order of Regional Director → file INC-28 with ROC → then CHG-1 accepted

Documents for CHG-8 (Condonation)

CHG-8 application to Regional Director
Affidavit / declaration by Director or CS
Charge instrument certified copy
Explanation for delay (genuine reasons preferred)
NOC from charge holder confirming no adversely affected creditor
Additional fees as directed by Regional Director

⚠️ IBC Risk: An unregistered charge has zero standing in insolvency proceedings under IBC 2016. If a company faces CIRP (Corporate Insolvency Resolution Process) before a missed charge is registered, the lender will be treated as an unsecured creditor. TAXAJ strongly recommends regularising all missed charge registrations immediately.

Step-by-Step Process

How to File CHG-1 — Creation of Charge with ROC

Standard procedure for registering a new charge (non-debenture) under Section 77. TAXAJ handles Steps 2–5 entirely — you only need to provide the charge instrument and Board resolution.

Board Meeting — Approval of Borrowing & Charge Creation

The Board of Directors must pass a resolution authorising: (a) the borrowing of the specific amount from the named lender, (b) creation of a charge on specified assets as security, and (c) authorisation to a Director to sign the charge instrument and file CHG-1 with the ROC. Under Section 179(3)(d), the Board has power to borrow money, and under Section 180(1)(a), creating charge on assets is a Board-level decision. If borrowing exceeds paid-up capital + free reserves, a shareholders' special resolution under Section 180(1)(c) is also required.

📋 Board resolution mandatory · Special resolution if Section 180(1)(c) threshold exceeded

Board ResolutionMinutes Book EntrySR at EGM (if Sec 180 applies)

Execution of Charge Instrument

The charge instrument — typically a loan agreement, deed of hypothecation, mortgage deed, or debenture trust deed — must be executed between the company and the charge holder (bank / lender). This document defines the nature of charge (fixed/floating), the assets charged, the amount secured, repayment terms, and the rights of the charge holder on default. The date on this instrument is the "date of creation of charge" from which the 30-day filing window is calculated. Ensure the instrument is appropriately stamped (stamp duty varies by state).

📋 Date of this document = Day 1 of the 30-day window

Loan AgreementMortgage DeedHypothecation AgreementStamp Duty Paid

File Form CHG-1 on MCA V3 Portal

File Form CHG-1 (Application for Registration of Creation/Modification of Charge other than Debentures) on the MCA V3 portal using the Director's DSC, within 30 days of execution of the charge instrument. Key attachments: certified copy of the charge instrument (signed by both the company and the charge holder), asset list with descriptions, and the Board resolution. CHG-1 must be signed by the Director on the MCA portal — the charge holder need not sign the e-form (they signed the physical instrument). Pay the applicable government fee based on the company's authorised share capital.

⏰ Within 30 days of charge creation · Director DSC required

Form CHG-1 (MCA V3)Director DSCCertified Charge InstrumentGovt Fee Payment

Obtain CHG-2 Certificate from ROC

After the ROC processes the CHG-1 filing and is satisfied with the compliance, it issues Form CHG-2 — Certificate of Registration of Charge. This certificate is conclusive proof under Section 77(3) that all requirements of Chapter VI of the Companies Act 2013 have been complied with. The Charge ID assigned by MCA is quoted in all subsequent filings related to this charge (CHG-4 for satisfaction, further modifications). Preserve the CHG-2 certificate carefully — banks and investors may request it during due diligence.

📜 CHG-2 = Conclusive proof of registration · Preserve permanently

Form CHG-2 CertificateMCA Charge ID Number

Update CHG-7 — Register of Charges at Company Office

Separately from the MCA filing, the company must maintain a physical Register of Charges in Form CHG-7 at its registered office. This register records every charge created by the company — date of creation, nature, amount, assets charged, charge holder details, CHG-2 certificate number, and date of satisfaction (when applicable). The CHG-7 register must be open for inspection by any member or creditor of the company free of charge, and by any other person on payment of a prescribed fee. The register must be authenticated by the Company Secretary or a person authorised by the Board.

📋 Maintained at registered office · Open for inspection

CHG-7 RegisterAuthentication by CS / Board Auth

All CHG Forms

Complete Forms Reference — CHG-1 to CHG-10

There are 10 forms under the Companies (Registration of Charges) Rules 2014. TAXAJ prepares, certifies, and files all of them.

Form CHG-1

Registration of Creation / Modification

Filed for creation or modification of charge (other than debentures). Filed by company or charge holder within 30 days. Signed by Director using DSC.

Company or Charge Holder · 30 days

Form CHG-2

Certificate of Registration (Creation)

Issued by ROC after successful CHG-1 filing. Conclusive proof of charge registration. Contains Charge ID and date. Preserve permanently.

Issued by ROC · Conclusive proof

Form CHG-3

Certificate of Registration (Modification)

Issued by ROC after successful CHG-1 modification filing. Confirms that modification of the charge has been registered on the MCA portal.

Issued by ROC · Modification proof

Form CHG-4

Satisfaction of Charge

Filed by company within 30 days of full repayment / satisfaction of charge. Triggers ROC notice to charge holder for confirmation. On satisfaction: CHG-5 issued.

Company · 30 days from satisfaction

Form CHG-5

Certificate of Satisfaction

Issued by ROC after CHG-4 is accepted and satisfaction is recorded. The MCA portal charge status changes to "Satisfied." Essential for clean due diligence.

Issued by ROC · Satisfaction proof

Form CHG-6

Notice of Appointment of Receiver / Manager

Filed when a charge holder appoints a Receiver or Manager over the charged assets (typically after company defaults). Not commonly filed in routine operations.

Charge Holder · On appointment

Form CHG-7

Register of Charges (Company Record)

Internal register maintained at company's registered office. Records all charges, modifications, and satisfactions. Open for inspection by members / creditors. Must be authenticated by CS.

Company Record · Perpetual · Inspection open

Form CHG-8

Application to Regional Director (Condonation)

Filed to seek Regional Director's approval for late CHG-1 filing beyond ROC's condonation power (beyond 300 days for pre-2019 charges, or after initial extension for post-2019).

To Regional Director · Late filing

Form CHG-9

Charge Registration — Debentures

Equivalent of CHG-1 specifically for debentures. Filed for creation or modification of charges related to debenture issuances. Debenture trust deed is the key instrument.

Debentures only · Same timeline as CHG-1

Penalties & Consequences

Non-Registration of Charge — Penalties & Legal Consequences

Section 86 of the Companies Act 2013 prescribes significant penalties. More critically, an unregistered charge becomes void in insolvency — the lender loses secured status.

Violation	Section	Company Penalty	Officer Penalty	Additional Consequence
Non-Filing / Late Filing
Not registering charge within 30 days	86	₹1,00,000 – ₹10,00,000	₹25,000 – ₹1,00,000 + imprisonment 6 months	Late fee on MCA portal
Charge holder fails to file if company defaults	78	—	Charge holder loses ability to enforce	Unregistered = unsecured
Willful furnishing of false information	86	Fraud liability	Prosecution under Sec 447	Personal liability
Consequences of Unregistered Charge
Void against liquidator on winding up	77(3)	Charge unenforceable · Lender becomes unsecured creditor · Loses priority in recovery
Void against creditors in CIRP (IBC)	IBC 2016	Only registered charges recognised as "financial debt" by Resolution Professional · Unregistered = operational creditor status
No deemed notice to third parties	81	Third party who lends money on same asset without seeing registered charge gets no protection → dispute over priority
Late Filing Fees on MCA
CHG-1 filed 0–30 days late	—	Normal MCA fee (based on authorised capital)		Acceptable
CHG-1 filed 31–90 days (condonation period)	—	Normal fee + additional condonation fee		Additional fee
CHG-1 filed beyond 300 days	—	Regional Director application needed + penalty		CHG-8 required

TAXAJ Pricing

Charge Creation / Modification / Satisfaction — Service Packages

TAXAJ's CS + CA team prepares all documents, coordinates with the bank, and files on MCA V3 — typically within 24 hours of receiving the charge instrument.

Creation / Modification

^₹2,999

CHG-1 + CHG-7 update

✓CHG-1 filing on MCA V3 within 24 hrs
✓Board resolution drafting
✓Charge instrument review
✓CHG-2 / CHG-3 certificate collection
✓CHG-7 register update

Get Started →

Creation & Modification of Charge — Frequently Asked Questions

Form CHG-1 must be filed within 30 days of the date of creation or modification of the charge under Section 77 of the Companies Act 2013. The date of creation is the date of execution of the charge instrument (loan agreement, mortgage deed, hypothecation agreement) — not the date the loan money is received. If filed after 30 days, additional fees apply. If filed beyond 300 days from creation, an application to the Regional Director in Form CHG-8 is required. After the Companies (Amendment) Ordinance 2019, charges created on or after 2nd January 2019 can seek ROC condonation up to 60 additional days (total 90 days), beyond which the Regional Director route applies.

Under Section 77, the primary obligation is on the company to file CHG-1 within 30 days. However, under Section 78, if the company fails to file within the prescribed time, the charge holder (bank/lender) can also file CHG-1 after giving notice to the company. If no response is received from the company within 14 days of notice, the ROC may allow the charge holder to register the charge. The filing fees paid by the charge holder can be recovered from the company. This provision protects banks from losing their security interest due to company non-compliance.

Under Section 77(3), an unregistered charge is void against the liquidator and any creditor of the company. This means: if the company is wound up or faces insolvency, the lender with an unregistered charge is treated as an unsecured creditor — losing priority over secured creditors in recovery. The debt obligation to repay still exists under the Indian Contract Act, but the lender loses the security. Under the IBC 2016, only registered charge holders qualify as financial creditors with voting rights in the Committee of Creditors (CoC). This makes CHG-1 filing critical for banks and NBFCs to protect their lending security.

Yes — Section 77 of the Companies Act 2013 requires registration of all charges, whether fixed or floating, on any type of asset (tangible or intangible), whether the asset is in India or abroad, and whether the charge is created within India or outside. This includes: mortgage on land and buildings, hypothecation of plant and machinery, pledge of shares or securities, charge on intellectual property (trademarks, patents), charge on book debts and receivables, floating charges on stock, and debenture trust deeds. The only exemption is charges specifically exempted by the Central Government in consultation with the RBI.

Yes. Under Section 179(3)(d) of the Companies Act 2013, the power to borrow money is exercised by the Board of Directors at a Board meeting (cannot be done by circular resolution). The Board must pass a resolution approving the borrowing and authorising the creation of the charge. Additionally, if the total borrowings (including existing loans) exceed paid-up share capital + free reserves + securities premium, a shareholders' special resolution under Section 180(1)(c) is also required. Failure to obtain this SR while borrowing beyond the threshold is a separate compliance violation. TAXAJ assists in determining whether a shareholders' meeting is needed based on the company's existing borrowing and financial position.

Form CHG-4 must be filed within 30 days of the date of full repayment / satisfaction of the charge under Section 82 of the Companies Act 2013. This date is typically the date of the last EMI payment, the date of the bank's No Objection Certificate (NOC), or the date of execution of the release deed — whichever is earlier. Condonation of delay up to 300 days can be sought from the ROC with additional fees. After receiving CHG-4, the ROC issues a notice to the charge holder and, if no objection is received within 14 days, records the satisfaction and issues Form CHG-5 — Certificate of Registration of Satisfaction of Charge.

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Creation & Modification of Charge withROC — Complete Guide