Recent Amendment in Registration of charges under Companies Act, 2013

RECENT AMENDMENT IN REGISTRATION OF CHARGES UNDER COMPANIES ACT,2013

Ministry of Corporate Affairs (MCA) has notified the Companies (Registration of Charges) Amendment Rules, 2022 to further amend the Companies (Registration of Charges Rules, 2014 vide notification no. G.S.R. 320(E) dated April 27, 2022. Amendments have been made in rule 3 (Registration of creation or modification of charge). It is important to note that the amendment rules are made effective from 27^th April 2022.

AMENDMENT IN RULE 3 OF COMPANIES (REGISTRATION OF CHARGES RULES, 2014)

Ministry of Corporate Affairs (MCA) notifies that rule 3 shall not apply to any charge required to be created or modified by a banking company under section 77 (Duty to register charge) in favor of the Reserve Bank of India when any loan or advance made to it under section 17 (4) (d) of the Reserve Bank of India Act, 1934.

Rule 3 of Companies (Registration of Charges Rules, 2014)

Rule 3 cast a duty on the Company that the particulars of the creation/modification of the charges shall be filed with the Registrar of Companies in E form CHG-1 (for other than debentures) or CHG-9 (for debentures) Section 17 of the RBI Act

Section 17 of the Reserve Bank of India Act, 1934 Act defines how the RBI (the central bank of India) can conduct business. As per section 17 (4) (d), the RBI can grant a loan against the security of promissory notes of any scheduled bank or State co-operative Bank, supported by documents of title to goods [such documents having been transferred], assigned, or pledged to any such bank as security for a [loan or advance made] for bona fide commercial or trade transactions, or to finance agricultural operations or the marketing of crops

There are certain forms, which were rolled out in this behalf on V3 Portal, which included charge related forms E-forms CHG-1, CHG-4, CHG-6, CHG-8, CHG-9.

The Ministry of Corporate Affairs (MCA) has on August 29, 2022, notified Companies (Registration of Charges) Second Amendment Rules, 2022, in addition to Rule 12 of the Companies (Registration of Charges) Rules, 2014, in exercise of the powers conferred by sections pertaining to registration of charges read with sub-sections (1) and (2) of section 469 of the Companies Act, 2013.

The said amendment by the MCA with respect to Registration of Charges Rules, is that the given e-form CHG-1, CHG-4, CHG-8 and CHG-9 shall be signed by the following persons, as the case may be which is to be filed with the Registrar of