How to Check a Company's Registered Charges

Knowing how to check a company's registered charges means knowing that there are two registers, not one, and that they answer different questions. The Registrar keeps one under section 81 that any person may inspect. The company keeps another at its registered office under section 85 that is free for a member or creditor.

How to check a company's registered charges at the Registrar

Section 81(1) requires the Registrar, in respect of every company, to keep a register containing particulars of the charges registered under Chapter VI, in the prescribed form and manner.

Section 81(2) sets the access rule, and it is the widest one in this part of the Act: the register shall be open to inspection by any person on payment of such fees as may be prescribed for each inspection. There is no requirement to be a member, a creditor, or to state a reason.

The general inspection machinery for anything the Registrar holds sits in section 399, which lets any person inspect documents kept by the Registrar by electronic means, and require a certified copy or extract, in each case on the prescribed fee. Because the Registrar's records are served through the Ministry of Corporate Affairs portal, that is where a charge search is actually run. How to find a company's financial statements at the ROC sets out the section 399 right in full, including the proviso that time-limits access in two prospectus-linked cases.

What each register will and will not tell you

The gap between the two is the reason to check both. A charge that the company recorded but never registered appears in the section 85 register and not in the Registrar's. A charge that was registered carries a certificate under section 77(2), and it is that certificate, not the company's own record, that section 77(3) requires before a liquidator or another creditor will take the charge into account.

Reading the dates, not just the entries

A charge register lags reality in both directions, and the Registrar holds one power to move ahead of it. All three have a statutory source.

• Registration lags creation. Section 77(1) gives thirty days from creation, and its provisos let the Registrar allow sixty days from creation, then a further sixty days on ad valorem fees, for charges created on or after the commencement of the Companies (Amendment) Act, 2019. A charge created last month may not be on the register yet.
• Satisfaction lags repayment. Section 82(1) gives thirty days from payment or satisfaction, and its proviso lets the Registrar allow up to three hundred days on additional fees. An open entry is not proof of an outstanding debt.
• The Registrar can move ahead of the company. Section 83(1) lets him enter a memorandum of satisfaction, in whole or in part, or of a release of part of the charged property, on evidence given to his satisfaction even where the company has sent no intimation. Section 83(2) then requires him to inform the affected parties within thirty days.

Section 80 is the rule that makes the register worth searching at all: where a charge is registered under section 77, any person acquiring the property, assets or undertaking, or any share or interest in it, is deemed to have notice of the charge from the date of registration. A buyer who did not look is treated as though they had.

When the company has not filed

If a charge you know exists is missing from the Registrar's register, section 78 is the route a lender uses. Where the company fails to register within the thirty days referred to in section 77(1), the person in whose favour the charge is created may apply to the Registrar, who may allow the registration within fourteen days after giving notice to the company, unless the company registers it or shows sufficient cause. That person may then recover the fees from the company.

Where the problem is an error rather than an absence, section 87 lets the Central Government, on the application of the company or any person interested, direct that the time for intimation be extended or that an omission or misstatement be rectified, where it was accidental, due to inadvertence or some other sufficient cause, or is not of a nature to prejudice creditors or shareholders.

Where this sits in the disclosure picture

Charges are one of the few company-level facts a listed-company investor cannot read off an exchange filing. They sit with the Registrar, under a different ministry from the market regulator.

• What is registration of charges covers the section 77 duty and why an unregistered charge fails against a liquidator.
• What is satisfaction of charge covers how an entry gets cleared and the show cause notice that precedes it.
• What is the company's register of charges covers the section 85 register and the free member and creditor inspection right.
• How to check promoter pledging covers the SEBI-side disclosure of security over promoter shares, which is published by the exchanges rather than the Registrar.

Flock reports the filings themselves, each stamped with its date and linked back to the exchange or regulator that published it. What any of it means for you is your call to make.