What Is a Company's Register of Charges?

The company register of charges under section 85 is the second of two registers that record the same security. The Registrar keeps one; the company keeps this one, at its registered office, and it has to include floating charges as well as fixed ones. A member or creditor can read it without paying anything.

What the company register of charges section 85 must contain

Section 85(1) sets three requirements at once, and each one does work:

• Where. The register is kept at the registered office of the company. Not at a branch, and not wherever the company's lender happens to sit.
• What. It shall include all charges and floating charges affecting any property or assets of the company, or any of its undertakings. The express mention of floating charges matters, because a floating charge is the kind most easily left out of a fixed-asset schedule.
• How much detail. It indicates in each case such particulars as may be prescribed, so the columns themselves live in the rules rather than in the section.

The proviso adds a fourth requirement that is easy to overlook: a copy of the instrument creating the charge shall also be kept at the registered office along with the register. The register is an index; the proviso is what puts the underlying document next to it.

Who can read it, and for what

Section 85(2) opens both the register and the instruments of charges to inspection during business hours:

The sub-section closes with a limit that applies to both rows: the inspection is subject to such reasonable restrictions as the company may, by its articles, impose. The right is statutory, but the manner of exercising it can be shaped by the company's own articles, so long as the restrictions are reasonable.

Note who is named in the free tier. Section 85(2)(a) gives a creditor the same fee-free inspection right as a member, even though a creditor is not a member and holds no shares. The sub-section names the two populations together and draws no distinction between them.

Two registers, and why both exist

The Act keeps a company's charge record in two places. They are not copies of each other, and the differences are the point.

The practical consequence runs in both directions. The company's register can show a charge that was never registered with the Registrar, because section 85 is a recording duty that does not depend on registration having happened. The Registrar's register carries the certificate that gives a charge its standing against a liquidator under section 77(3), which the company's own register cannot confer.

What a default costs

Chapter VI carries one penalty provision rather than a separate one per section. Section 86(1) makes a company in default in complying with any of the provisions of the Chapter liable to a penalty of five lakh rupees, and every officer of the company who is in default liable to fifty thousand rupees. Failing to keep the section 85 register, or refusing an inspection it requires, falls inside that.

Section 86(2), inserted by Act 22 of 2019, section 12, with effect from 2 November 2018, is narrower and harder. A person who wilfully furnishes false or incorrect information or knowingly suppresses material information required to be registered under section 77 is liable for action under section 447.

Where this sits in the disclosure picture

For a listed company, neither charge register is the document an outside investor reads first. But an undisclosed or newly created charge over the company's assets changes what its balance sheet is worth, and neither register shows up in a shareholding pattern.

• What is registration of charges covers the section 77 duty, the thirty day window and the section 77(3) consequence of missing it.
• How to check a company's registered charges covers the section 81 register and the inspection right in section 399.
• What is a registered office covers the section 12 office this register has to be kept at.
• What is the register of members is the ownership register that sits under a different chapter and a different inspection rule.

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.