Registration charges on properties acquired subject to charge
1.Check whether your company has acquired any property subject to registration charges.
2.For this Topic too, the word “charge” should be understood in the same manner as it should be understood. When the company is said to have incorporated a charge on any of its properties.
3.When a company acquires properties subject to charge, it has a statutory duty to file the charge on such properties with the Registrar of Companies (ROC).
4.A company might acquire another company through acquisition of its shares. The properties and undertakings of such acquired company may be charged for securing loans and liabilities of that company. However that is not the scope of this Topic. This topic covers a situation where a private limited company acquires any property or undertaking through an out- right purchase on itemized basis or through a slump sale.
5.When a company acquires an undertaking or other company through a process of amalgamation or merger or demerger. Such acquisition will not come within the meaning of acquisition under section 79 of the companies act, 2013. Such no registration as contemplated under section 79 of the companies act, 2013 is necessary. In such cases, transfer of the charged properties or undertakings take place through operation of law. As such upon filing of the scheme of amalgamation or merger or demerger by the high court in pursuance of sections 391 to 394 of the companies act, 1956 or by the National Company Law Tribunal (NCLT) or ROC.
When these provisions become effective, the properties that are subject to charge of the transferor or demerged companies will get transferred to the Transferee Company by virtue of the sanctioned scheme and properties of the Transferor. The Demerged Company become properties of the Transferee Company together charges thereon. As such charge numbers of such properties should also get transferred ipso facto to the Transferee Company through a technical process. In such cases, the question of filing of particulars of properties acquired subject to charges will not arise as envisaged under section 79 of the companies Act, 2013.
6.Section 233(9)(b) of the 2013 act forming part of chapter XV states that the charges. If any, on the property of the transferor company shall be applicable and enforceable. If the charges were on the property of the transferee company.
7.Save as aforesaid, when a company acquires properties subject to charge. The particulars of properties acquired by a company subject to charge. It must be filed with the registrar of companies within 30 days of acquisition. Unlike the case where a private limited company creates a charge on its property after its acquisition. Here it is a case of a private limited company acquiring the properties which are already subject to registration charge. Therefore even though those properties were originally charged at some point of time. The time limit for filing the particulars of properties acquired subject to charge must be supposed from the date of acceptance.
8.Thus in such cases, date of creation of charge as well as date of modifications. If any, of such charge on the properties which were acquired by a public limited company subject to pre-existing charges. The date of acquisition are important information.
9.The prescribed e-Form CHG-1, fee and procedures including those relating to verification of instruments creating charge as well as date of modifications. If any, of such charge on the properties which were acquired by a private limited company subject to pre-existing charges.
10.In case of acquisition of property, subjected to charge, furnish in Sl. No. 13 of the e-Form CHG-1. The details associating to the active charge on the property is assumed.
(a) Date of instrument creating or evidencing the charge;
(b) Date of acquisition of the property;
(c) Amount of the charge (in Rs.);
(d) Description of the instrument creating or evidencing the charge;
(e) Particulars of the property charged;
11.Furnish in Sl. 14 of the e-Form CHG-1. The full details including the location of the charged properties should also be described. If the charge on the properties acquired subject to charge is subject to certain terms and conditions. It may also be mentioned in Sl. No.8 of e-Form CHG-1.
12.Rule 5 of the companies (Registration of Charges) Rules, 2014 states that the provisions of the Companies Act, 2013. The rules relating to making application for getting any delay in filing with the registrar of companies. The particulars of charges and modification of charges mutatis mutandis apply to condonation of any delay in filing the particulars of properties acquired subject to registration charges.
13.Up to 300 days from the date of acquisition of properties subject to registration charges. The registrar of companies has powers to condone the delay and register the same. If the delay in question is beyond the 300 days, application must however be made to the central government for acquiring forgiveness of detain in registering. The particulars of properties subject to charge in the same manner. In which such applications have to be made in the case of delay in filing particulars of registration charges. The modifications of charges if the delay in filing goes beyond 300 days.
14.Company must enter the particulars of properties received substance to charges in a register of charges kept. It is maintained by the company for this purpose. The register must be in the prescribed form viz., e-Form CHG-7. The procedure for entering particulars in the register of charges.
15.Consequences of failure to register the particulars of properties subject to charges. The nature of offences and punishments thereto are the same as those arising from default in filing of registration charges.
16.When a company gets the particulars of properties acquired by it subject to pre-existing charges on its properties registered with the registrar of companies. Any person subsequently acquiring such assets, property, undertakings or any share or part thereof or.interest therein. It shall be deemed to have notice of the registration charge from the date of such registration may registered in Coimbatore and Salem and Madurai. (Section 80 of the 2013 Act). This is a beneficial provision and operates as a constructive public notice.
17.Section 77(3) of the 2013 Act states that notwithstanding anything contained in any law for the time being. No charge incorporated by a registration company. It shall be taken into account by the liquidator. or any other creditor. Unless it is duly registered under sub-section (1). Under sub-section (2) of section 77 of the companies Act, 2013, a registration certificate of such charge is given by the registrar. The certificate of registration is to provide by the registrar in Coimbatore.This provision would not apply to default in filing the particulars of properties acquired subject to charges. As the registration charges on those properties are not incorporated by the company which goes into liquidation.
18.However the position will change. When the acquirer company modifies those charges and fails to register.The modification of charges on the properties that it had acquired subject to charges. As registration charges incorporated by a company are identified by the system of ministry of corporate affairs by a unique charge number. This registration number you will get in Coimbatore office.Registering of modification of charges will become difficult. Unless the charge is first registered. The registration takes placed in Coimbatore. Therefore care must be taken to ensure that the particulars of properties acquired subject to charges are duly registered on time.
