S-132 importance

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Querist : Anonymous

Querist : Anonymous (Querist)

06 April 2012 what is the importance of s-132 in co. act 1956?

why comapny has to register the charge in ROC?

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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09 April 2012 Under Section 132 of the Companies Act, the Registrar shall give a certificate of the registration of charge. The certificate shall be conclusive evidence that the requirement of Part V of the Act as to registration of the charge have been complied with. The object of the certificate is to prevent the security from being upset if subsequently it turns out that the company or Registrar has made mistake as to what has been placed on the register of charges by the Registrar.

The most important reason for registering a charge is that the members of the company dealing with the company should be aware of the particulars of the properties, which are mortgaged, or subject to a charge. Unless this is done, the securities shall get diluted and no creditor will be in a position to recover the loan granted.

The main purpose of registration of charges is to give a notice so as to enable a prospective lender to ascertain the nature and extent of the security created on the company's property in order to arrive at a decision on the manner, extent and type of the lending.

Further an unregistered charge is void against the liquidator and any creditor .