A company's borrowings are often backed by securities, on
the strength of which loans are given by the banks and financial
institutions. The security is given for securing loans or
debentures by way of mortgage on the assets of the company when the
Charge is created. The Companies Act, 2013 covers the provisions
relating to registration, modification, satisfaction of Charges,
consequences of failure in registration inclusive of delay in
registration.
The main purpose of registration of a Charge is to give notice
to the Registrar of Companies ("RoC")
and to people who intend to advance money to the company about the
encumbrance created on the assets of the company. The prospective
lender may inspect the index of Charges and forms on the Ministry
of Corporate Affairs portal.
