What is Charge 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.
Charge is a term you will often come across in Company Law. This guide explains what Charge means, gives a simple example, and shows why it matters for taxpayers and businesses — in plain English.
What is Charge?
Charge is a security interest or lien created on a company's assets to secure a loan or borrowing, which must be registered with the RoC.
In practical terms, Charge is a company-law concept — it governs how companies are formed, managed or how their decisions are made. Understanding it helps you read financial documents, stay compliant and make better decisions.
Charge explained with an example
A bank lending to a company creates a charge on its factory as security, registered in Form CHG-1. Examples like this make it easier to see how Charge works in real situations.
Why Charge matters
Registering charges gives lenders priority and provides public notice of encumbrances on assets.
Charge at a glance
| Category | Company Law |
| Meaning | A security interest or lien created on a company's assets to secure a loan or borrowing, which must be registered with the RoC. |
| Example | A bank lending to a company creates a charge on its factory as security, registered in Form CHG-1. |
Key points to remember
- Where it applies: Company Law
- In short: A security interest or lien created on a company's assets to secure a loan or borrowing, which must be registered with the RoC.
- Why it matters: Registering charges gives lenders priority and provides public notice of encumbrances on assets.
Related terms
If you are learning about Charge, these related terms are worth knowing too:
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