MCA Form CHG-1: Particulars of Creation or Modification of Charge

MCA Form CHG-1: Particulars of Creation or Modification of Charge. Sections and Provisions
e-Form CHG-1 is required to be filed under Sections 77, 78, and 79 and Section 384 and Rule 3(1) of the Companies Rules, 2014.
Section 77:

It shall be the duty of every company creating registered outside India, on its property or assets or any of its undertakings, whether tangible or otherwise, and situated in or outside India, to register the particulars of the charge signed by the company and the charge-holder together with the instruments, if any, creating such charge in such form, on payment of such fees and in such manner as may be prescribed, with the Registrar within thirty days of its creation: Provided that the Registrar may, on an application by the company, allow such registration to be made within a period of three hundred days of such creation on payment of such additional fees as may be prescribed: Provided further that if registration is not made within a period of three hundred days of such creation, the company shall seek extension of time in accordance with section 87: Provided also that any subsequent registration of a charge shall not prejudice any right acquired in respect of any property before the charge is actually registered.

Where a charge is registered with the Registrar under sub-section (1), he shall issue a certificate of registration of such charge in such form and such manner as may be prescribed to the company and to the person in whose favor the charge is created.

Notwithstanding anything contained in any other law for the time being in force, no charge created by a company shall be considered by the liquidator or any other creditor unless it is duly registered under sub-section (1) and a certificate of registration of such charge is given by the Registrar under sub-section (2).

Nothing in sub-section (3) shall prejudice any contract or obligation for the repayment of the money secured by a charge.

Section 78:
Where a company fails to register the charge within the period specified in section 77, without prejudice to its liability in respect of any offense under this Chapter, the person in whose favor the charge is created may apply to the Registrar for registration of the charge along with the instrument created for the charge, within such time and in such form and manner as may be prescribed and the Registrar may, on such application, within a period of fourteen days after giving notice to the company, unless the company itself registers the charge or shows sufficient cause why such charge should not be registered, allow such registration on payment of such fees, as may be prescribed: Provided that where registration is effected on application of the person in whose favor the charge is created, that person shall be entitled to recover from the company the amount of any fees or additional fees paid by him to the Registrar for registration of charge.
Section 79:
The provisions of section 77 relating to registration of charges shall, so far as may be, apply to (a) a company acquiring any property subject to a charge within the meaning of that section; or (b) any modification in the terms or conditions or the extent or operation of any charge registered under that section.
Section 384:
(1) The provisions of section 71 shall apply mutatis mutandis to a foreign company.
(2) The provisions of section 92 shall, subject to such exceptions, modifications, and adaptations as may be made therein by rules made under this Act, apply to a foreign company as they apply to a company incorporated in India.
(3) The provisions of section 128 shall apply to a foreign company to the extent of requiring it to keep at its principal place of business in India, the books of account referred to in that section, concerning monies received and spent, sales and purchases made, and assets and liabilities, during or about its business in India. (4) The provisions of Chapter VI shall apply mutatis mutandis to charges on properties that are created or acquired by any foreign company. (5) The provisions of Chapter XIV shall apply mutatis mutandis to the Indian business of a foreign company as they apply to a company incorporated in India.
Rule 3 (1):  
(1) For registration of charge as provided in subsection (1) of section 77, section 78, and section 79, the particulars of the charge together with a copy of the instrument, if any, creating or modifying the charge in Form No.CHG-1 (for other than Debentures) or Form No.CHG-9 (for debentures including rectification), as the case may be, duly signed by the company and the charge holder and filed with the Registrar within a period of thirty days of the date of creation or modification of charge along with the fee.
Purpose
All companies must report any changes or new charges on their assets to the Registrar of Companies within a set timeframe. These charges can be on different types of assets, whether in India or abroad, and can involve lenders like banks or financial institutions. Every change or new charge needs to be filed using e-Form CHG-1 to the relevant Registrar of Companies for Indian companies or to the Registrar of Companies in Delhi for foreign companies.
Key Information:
The Form is available on the MCA version 3.
CHG-1 form shall be processed in STP mode. 
Documents Required:

Instrument(s) of creation or modification of charge is a mandatory attachment in all cases.

Instrument(s) evidence that is already subject to charge such acquisitions. This attachment is mandatory in case there is any acquisition of property that is already subject to charge.

Of all joint charge holders. It is mandatory if the number of charge holders is more than one.

Any other information can be provided as an optional attachment(s).

Timeline
Every company is required to file CHG-1 within 30 days from the date of the creation of the charge by paying the normal fees.
If the registration is not made within 30 days a further period of 30 days is allowed by paying the additional fees.
However, in case the registration of the charge is not made within 60 days from the date of creation of the charge a further period of 60 days is allowed by paying the Ad valorem fees.
For Example:
XYZ Ltd. created a charge on its assets on June 1, 2024, and needs to register it promptly. The first deadline for filing the CHG-1 form is July 1, 2024, where only the normal fee applies. If XYZ Ltd. misses this date, they have until August 1, 2024, to register, but they will incur additional fees. The final deadline is October 1, 2024, where the fees become Ad Valorem, calculated based on the charge amount. To avoid higher costs, it's best for XYZ Ltd. to register the charge as early as possible.
Fees

Nominal Share Capital

Fee applicable

Less than 1,00,000

Rupees 200

1,00,000 to 4,99,999

Rupees 300

5,00,000 to 24,99,999

Rupees 400

25,00,000 to 99,99,999

Rupees 500

1,00,00,000 or more

Rupees 600

Key Considerations:

It has now been compulsory to file a charge form at least within 120 days of the date of creation of the charge failing which the company will be unable to file CHG-1 and the consequence upon which the lender will be treated as unsecured creditors.

On successful submission of the CHG-1, SRN will be generated and shown to the user which will be used for future correspondence with MCA.

On successful submission of the CHG-1, a challan will be generated depicting the details of the fees paid by the user to the Ministry. It is the acknowledgment to the user that the has been filed.

When a CHG-1 is registered by the authority concerned, an acknowledgment of the same with related documents, if any is sent to the user in the form of an email to the email id of the company/charge-holder/any other interested person.

Certificate of registration of charge and certificate of registration for modification of charge are generated consequent upon approval in case of creation or modification of charges and sent to the user as an attachment to the email.

MCA Help-Kit

Sections and Provisions

e-Form CHG-1 is required to be filed under Sections 77, 78, and 79 and Section 384 and Rule 3(1) of the Companies Rules, 2014.

Section 77:

It shall be the duty of every company creating registered outside India, on its property or assets or any of its undertakings, whether tangible or otherwise, and situated in or outside India, to register the particulars of the charge signed by the company and the charge-holder together with the instruments, if any, creating such charge in such form, on payment of such fees and in such manner as may be prescribed, with the Registrar within thirty days of its creation: Provided that the Registrar may, on an application by the company, allow such registration to be made within a period of three hundred days of such creation on payment of such additional fees as may be prescribed: Provided further that if registration is not made within a period of three hundred days of such creation, the company shall seek extension of time in accordance with section 87: Provided also that any subsequent registration of a charge shall not prejudice any right acquired in respect of any property before the charge is actually registered.
Where a charge is registered with the Registrar under sub-section (1), he shall issue a certificate of registration of such charge in such form and such manner as may be prescribed to the company and to the person in whose favor the charge is created.
Notwithstanding anything contained in any other law for the time being in force, no charge created by a company shall be considered by the liquidator or any other creditor unless it is duly registered under sub-section (1) and a certificate of registration of such charge is given by the Registrar under sub-section (2).
Nothing in sub-section (3) shall prejudice any contract or obligation for the repayment of the money secured by a charge.

Section 78:

Where a company fails to register the charge within the period specified in section 77, without prejudice to its liability in respect of any offense under this Chapter, the person in whose favor the charge is created may apply to the Registrar for registration of the charge along with the instrument created for the charge, within such time and in such form and manner as may be prescribed and the Registrar may, on such application, within a period of fourteen days after giving notice to the company, unless the company itself registers the charge or shows sufficient cause why such charge should not be registered, allow such registration on payment of such fees, as may be prescribed: Provided that where registration is effected on application of the person in whose favor the charge is created, that person shall be entitled to recover from the company the amount of any fees or additional fees paid by him to the Registrar for registration of charge.

Section 79:

The provisions of section 77 relating to registration of charges shall, so far as may be, apply to (a) a company acquiring any property subject to a charge within the meaning of that section; or (b) any modification in the terms or conditions or the extent or operation of any charge registered under that section.

Section 384:

(1) The provisions of section 71 shall apply mutatis mutandis to a foreign company.

(2) The provisions of section 92 shall, subject to such exceptions, modifications, and adaptations as may be made therein by rules made under this Act, apply to a foreign company as they apply to a company incorporated in India.

(3) The provisions of section 128 shall apply to a foreign company to the extent of requiring it to keep at its principal place of business in India, the books of account referred to in that section, concerning monies received and spent, sales and purchases made, and assets and liabilities, during or about its business in India. (4) The provisions of Chapter VI shall apply mutatis mutandis to charges on properties that are created or acquired by any foreign company. (5) The provisions of Chapter XIV shall apply mutatis mutandis to the Indian business of a foreign company as they apply to a company incorporated in India.

Rule 3 (1):

(1) For registration of charge as provided in subsection (1) of section 77, section 78, and section 79, the particulars of the charge together with a copy of the instrument, if any, creating or modifying the charge in Form No.CHG-1 (for other than Debentures) or Form No.CHG-9 (for debentures including rectification), as the case may be, duly signed by the company and the charge holder and filed with the Registrar within a period of thirty days of the date of creation or modification of charge along with the fee.

Purpose

All companies must report any changes or new charges on their assets to the Registrar of Companies within a set timeframe. These charges can be on different types of assets, whether in India or abroad, and can involve lenders like banks or financial institutions. Every change or new charge needs to be filed using e-Form CHG-1 to the relevant Registrar of Companies for Indian companies or to the Registrar of Companies in Delhi for foreign companies.

Key Information:

The Form is available on the MCA version 3.

CHG-1 form shall be processed in STP mode.

Documents Required:

Instrument(s) of creation or modification of charge is a mandatory attachment in all cases.
Instrument(s) evidence that is already subject to charge such acquisitions. This attachment is mandatory in case there is any acquisition of property that is already subject to charge.
Of all joint charge holders. It is mandatory if the number of charge holders is more than one.
Any other information can be provided as an optional attachment(s).

Timeline

Every company is required to file CHG-1 within 30 days from the date of the creation of the charge by paying the normal fees.

If the registration is not made within 30 days a further period of 30 days is allowed by paying the additional fees.

However, in case the registration of the charge is not made within 60 days from the date of creation of the charge a further period of 60 days is allowed by paying the Ad valorem fees.

For Example:

XYZ Ltd. created a charge on its assets on June 1, 2024, and needs to register it promptly. The first deadline for filing the CHG-1 form is July 1, 2024, where only the normal fee applies. If XYZ Ltd. misses this date, they have until August 1, 2024, to register, but they will incur additional fees. The final deadline is October 1, 2024, where the fees become Ad Valorem, calculated based on the charge amount. To avoid higher costs, it's best for XYZ Ltd. to register the charge as early as possible.

Fees

Nominal Share Capital	Fee applicable
Less than 1,00,000	Rupees 200
1,00,000 to 4,99,999	Rupees 300
5,00,000 to 24,99,999	Rupees 400
25,00,000 to 99,99,999	Rupees 500
1,00,00,000 or more	Rupees 600

Key Considerations:

It has now been compulsory to file a charge form at least within 120 days of the date of creation of the charge failing which the company will be unable to file CHG-1 and the consequence upon which the lender will be treated as unsecured creditors.
On successful submission of the CHG-1, SRN will be generated and shown to the user which will be used for future correspondence with MCA.
On successful submission of the CHG-1, a challan will be generated depicting the details of the fees paid by the user to the Ministry. It is the acknowledgment to the user that the has been filed.
When a CHG-1 is registered by the authority concerned, an acknowledgment of the same with related documents, if any is sent to the user in the form of an email to the email id of the company/charge-holder/any other interested person.
Certificate of registration of charge and certificate of registration for modification of charge are generated consequent upon approval in case of creation or modification of charges and sent to the user as an attachment to the email.