Create and Register explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
To register a charge, file e-Form CHG-1 with the Registrar within 30 days of creating the charge, attaching the charge instrument. Delay up to a further 60 days is allowed with additional fees, and beyond that with ad valorem fees (total 120 days for recent charges). On approval, a CHG-2 certificate is issued.
Overview
When a company borrows against its assets — a loan secured on property, plant, receivables or a hypothecation of stock — a "charge" is created on those assets. The law requires this charge to be registered with the Registrar so that lenders and the public know the assets are encumbered. e-Form CHG-1 is the instrument for this registration.
When It Is Required & Legal Basis
Section 77 of the Companies Act, 2013 requires every company creating a charge on its property or assets, within or outside India, to register the particulars with the Registrar within 30 days of creation. Rule 3 of the Companies (Registration of Charges) Rules, 2014 prescribes CHG-1 (and CHG-9 for debentures). Section 78 allows the charge-holder to register if the company defaults.
Step-by-Step Process
- Execute the charge. The company and lender execute the loan/charge instrument (e.g. deed of hypothecation, mortgage).
- Prepare CHG-1. Fill e-Form CHG-1 with charge details — amount secured, date of creation, nature and description of assets, and charge-holder particulars.
- Attach instrument. Attach the executed charge instrument and any related documents.
- Obtain signatures. Get the form signed by the company and charge-holder and certified by a practising CA/CS/CMA.
- File within 30 days. File CHG-1 within 30 days of creation, paying the applicable fee.
- Receive certificate. On approval, obtain the CHG-2 certificate of registration and update the register of charges (CHG-7).
Forms, Attachments & Fees
| Form / Item | Purpose | Timeline / Fee |
|---|---|---|
| CHG-1 | Register creation of charge | Within 30 days of creation |
| CHG-1 (extended) | Delayed filing 31–120 days | Additional / ad valorem fees |
| Charge instrument | Deed of hypothecation/mortgage | Mandatory attachment |
| CHG-2 | Certificate of registration issued | On approval |
| CHG-7 | Company's register of charges | Maintained internally |
Timeline & Due Dates
The primary window is 30 days from creation. For charges created on or after 2 November 2018, filing is allowed within a further 60 days on payment of additional fees, and thereafter within another 60 days on payment of ad valorem fees — an outer limit of 120 days. Beyond this, condonation of delay by the Central Government is needed.
Penalty for Delay / Non-compliance
Beyond escalating additional/ad valorem fees, failure to register attracts penalty on the company and officers in default under Section 86. Critically, under Section 77 an unregistered charge is not taken into account by the liquidator or any creditor — the security is effectively void against them, though the debt itself still stands.
Practical Tips
- File CHG-1 well within 30 days — additional and ad valorem fees rise steeply with delay.
- Ensure the assets, amount and dates in CHG-1 exactly match the executed instrument.
- If the company drags its feet, the lender should file under Section 78 to protect its security.
- Update the internal register of charges (CHG-7) alongside the MCA filing.