Creation or modification of charge

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sumathy sundararajan (Querist)
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14 December 2013 Hi all,

when is a charge deemed to be created or modified outside India?

It would be helpful if some one helps me with an answer.

thanks
sumathy

Ajay Mishra

Ajay Mishra (Expert)
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14 December 2013 Hi

Sections 124 to 145 of the Companies Act, 1956 deal with registration of charges by companies. The subject can be conveniently divided in five topics :-
Ø Filing of particulars of charge created.
Ø Filing of particulars of modification of charge.
Ø Filing of particulars of series of debentures.
Ø Filing of particulars of satisfaction of charge.
Ø Condonation of delay in filing of particulars of charges created / modified / satisfied.

CREATION OF CHARGE (Section 125)
If a charge created by the company falls within any of the classes as specified in section 125 (4), its particulars shall be filed with the Registrar of Companies Act, 1956 within 30 days of creation of charge. If particulars of charge could not be filed within 30 days, the ROC has power to extend the said period by 30 more days subject to payment of additional filing fee by the Company.
Particulars of creation of charge shall be filed in Form No. 8 & 13, in 3 sets, alongwith all the papers / instruments relating to creation of charge. Form No. 8 includes the following details :
· Description of instrument creating the charge
· Amount secured
· Property charged
· Terms & conditions of charge
· Name & address of person entitled to charge
Registrar of Companies (ROC) will verify the particulars filed under Form No. 8 & 13 and thereafter shall register charge which is conclusive evidence of compliance with the requirements as to registration of the charge. ROC shall deliver 2 sets duly registered under seal and signature, one for lender and second for borrower.

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Ajay Mishra

Ajay Mishra (Expert)
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14 December 2013
MODIFICATION OF CHARGE (Section 135)
Any change in terms / conditions / extent of operation of any charge already registered tantamount to modification under Companies Act, 1956, such as : -
· Change in rate of interest (other than bank rate), repayment period or any other material term of loan.
· Further charge for the same loan by way of additional security.
· Increase in limit.
· Change in nature of security in respect of charge already created.
Again Form No. 8 & 13, in 3 sets, are required to be filed with ROC within 30 days ( within 60 days with additional fee ). The said forms will include the instrument modifying the original charge.
ROC will register the same under seal and signature and will deliver 2 sets of modifications, one for lender and second for borrower.

The same provision is applicable for charge is property situated out side India.

Read Form-8 with instruction kit carefully.

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