CONCEPT OF CHARGE:
The Companies Act, 2013 defines a Charge as an interest or lien created on the assets or property of a Company or any of its undertaking as security and includes a mortgage U/s 2(16).
Need: The financial institutions/banks do not lend their monies unless they are sure that their funds are safe and they would be repaid as per agreed repayment schedule along with payment of interest. In order to secure their loans they resort to creating right in the assets and properties of the borrowing companies, which is known as a charge on assets.
Section 77: Registration of Charges
A company creating charge, shall, register the particulars of the said charge with the RoC within 30 days of its creation.
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