Satisfaction of Charge

WHAT IS SATISFACTION OF CHARGES?

When company repays its secured loan fully to the lender or when property or asset charged has been released from charge then it is known as satisfaction of charges. Every company is required to intimate registrar about the satisfaction of charges.

NEED FOR INTIMATION OF SATISFACTION OF CHARGES

Satisfaction is intimated to ROC so that the assets or properties which are free from encumbrance can be updated in the system such that there is no loan of the company secured against it. Banks do check indexation of charges before giving the secured loan so this is very necessary for the company to update the Registrar with respect to satisfaction of charges.

PROCEDURE FOR SATISFACTION OF CHARGES

• STEP-1: Convene Board Meeting:- Board meeting of the company should be conducted after giving notice to the Board of Director to pass resolution for:
  • Authorising director or any other person to intimate registrar on behalf of the company and to do such other acts as may be required in this respect.
  • Taking note of receiving “No Dues Certificate” from the lender.
• STEP-2: Filing particulars of satisfaction of charges:- The Company shall file particulars of satisfaction of charges within 30 days from the date of payment in full of any debt against which charge is created and registered with registrar. The particulars of satisfaction of charges shall be filed in form CHG-4 along with the prescribed fees.
• STEP-3: Registrar sent notice to charge holder:- The registrar on receipt of intimation of satisfaction of charges by the company sent notice in this regard to the charge holder calling him to show cause within 14 days as to why satisfaction of charge should not be recorded as intimated to registrar. This step is not required in case CHG-4 form is filed by charge holder itself.
• STEP-4: Application for condonation of delay:- If company does not file intimation of satisfaction of charges within 30 days from the date of payment in full of any debt against which charge is created and registered with registrar than it is required to make an application to
  • The Registrar, the registrar may on an application by company or charge holder allow such intimation to be made within 300 days from the date of payment in full of any charge registered.
  • Central Government (Regional Director) in case company does not file intimation of satisfaction of charges within 300 days in form CHG-8.
• STEP-5: Certificate of Registration of Satisfaction of Charge:- where the Registrar is satisfied he shall enter in the register of charges a memorandum of satisfaction of charge in full and shall issue a Certificate of Registration of Satisfaction of Charge to the company in form CHG-5.

TIME LIMIT TO INTIMATE REGISTRAR ABOUT SATISFACTION OF CHARGES

As per the Companies Act, 2013 a company shall intimate the registrar about satisfaction of charges within a period of 30 days from the date of payment in full of any charge registered in form CHG-4 along with the prescribed fees.

• However the Registrar may on an application by company or charge holder allow such intimation to be made within 300 days from the date of payment in full of any charge registered.
• In case company does not file intimation of satisfaction of charges within 300 days than it is required to make an application to Central Government (Regional Director) in form CHG-8 for the purpose of condonation of delay.

WHO CAN MAKE APPLICATION FOR REGISTRATION OF SATISFACTION OF CHARGE

Application can be made by:

• Creator of charge which means company.
• Charge holder, if company fails to make an application.

E-FORMS FOR REGISTRATION OF SATISFACTION OF CHARGE

Following forms are required for registration of satisfaction of charge:

• CHG-4- Application by company for registration of satisfaction of charge.
• CHG-5- Issue of Certificate of Registration of Satisfaction of Charge by Registrar.
• CHG-8- Application for condonation of delay by the company to the Central Government.
• INC-28- Order passed by CG regarding condonation of delay shall be filed in this form by the company to the ROC along with CHG-4.

WHAT PARTICULARS OF CHARGES SHOULD BE FILED?

The following particulars of charge should be filed with the Registrar:

• Charge creation identification number.
• Particulars of charge holder.
• Date of satisfaction of charge.
• Particulars of subsequent modifications.

DOCUMENTS REQUIRED

Following Documents are required:

• “No Dues Certificate” from charge holder.
• Copy of Board resolution.
• DSC of charge holder and Director

GOVERNMENT FEES

Fee in case company having share capital

Fee in case company not having share capital

Additional Fee