Companies (Registration of Charges) Amendment Rules
Companies (Registration of Charges) Amendment Rules, 2022
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 27th April 2022. The present article briefs the provisions introduced vide the Companies (Registration of Charges) Amendment Rules, 2022.
Amendment in Rule 3 of Companies (Registration of Charges Rules, 2014
Ministry of Corporate Affairs (MCA) notifies that the 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
Registration of Charges in Company
When a company is financial assistance, or working capital finance as a loan or debt, the bank or financial institution requires security (i.e., property, vehicle, etc.,) for the loan provided. If proper security is created over the assets of the company, then the bank or financial institution can take possession of the assets secured and conduct the sale, to repay the loan. The Companies Act, 2013 requires all companies to file the requisite particulars with the ROC for all security created over the assets of the company. The process of creating security over assets of the company is referred to as registration of charges or creation of charges
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