A bank loan creates a charge on your assets. If you don't register it within 30 days, the clock to a permanent, unfixable problem has already started.
The window: 30 days (normal) → 60 days (extra fee) → 120 days (ad valorem fee) → after 120 days, the door is bolted.
A company takes a ₹2 crore term loan. The bank gets a hypothecation charge over plant and receivables, the money lands, and operations roll on. Nobody files CHG-1. Four months later, a buyer's due-diligence team pulls the company's charge index — and finds the bank's security was never registered. By then it's past 120 days. The charge can no longer be registered at all, and if the company ever goes into liquidation, that "secured" lender ranks alongside unsecured creditors. The deal stalls; the bank is furious; and there is no form left to file.
Charge registration is the most unforgiving deadline in the secretarial calendar — not because the penalty is huge, but because the window slams shut and stays shut. Here is exactly how it works.
BOTTOM LINE
- Who: Every company that creates or modifies a charge on its assets — except debenture charges, which use CHG-9. The charge holder can file too, under Section 78.
- By when: 30 days from creation. Filing is still possible up to 60 days (extra fee) and 120 days (ad valorem fee). After 120 days, it cannot be filed.
- Miss it: The charge becomes void against the liquidator and other creditors (Section 77(3)); penalty under Section 86 — up to ₹5 lakh on the company and ₹50,000 on each officer in default.
What is a "charge," and what does CHG-1 do?
Governs this section: Section 2(16) & Section 77, Companies Act, 2013; Rule 3, Companies (Registration of Charges) Rules, 2014
A charge is a security interest a company creates over its assets to back a debt — a mortgage, a hypothecation, a pledge, a lien. Section 2(16) defines it broadly enough to cover almost any "we'll let the lender claim this asset if we default" arrangement.
CHG-1 is the form that puts that charge on the public record at the Registrar of Companies. That registration does two jobs: it gives the lender legal priority over the charged asset, and it warns the world — any future buyer or lender is "deemed to have notice" of it. The certificate the ROC issues (Form CHG-2) is conclusive evidence that the charge is validly registered.
Skip the filing and the debt doesn't vanish — the company still owes the money. What vanishes is the security. An unregistered charge is worthless exactly when it matters most: insolvency.
What's the real deadline — 30 days or 120?
Governs this section: proviso to Section 77(1) (charges created on/after 2 November 2018)
Both, in a sense. There is one deadline and two extensions, each more expensive than the last:
| Window | When | What it costs |
|---|---|---|
| Normal | Within 30 days of creation | Normal fee only |
| Additional fee | Day 31 to day 60 | Normal fee + additional fee (3× for small companies/OPCs, 6× for others) |
| Ad valorem | Day 61 to day 120 | Normal + additional + ad valorem fee on the charge amount |
| Closed | After day 120 | Cannot be filed — no condonation |
DEADLINE — treat it as 30 days, not 120.
The 60- and 120-day extensions exist, but they cost real money and the ad valorem fee scales with the loan. Day 120 is an absolute outer wall for any charge created on or after 2 November 2018. File at creation, the same week the instrument is signed.
What happens on day 121?
Governs this section: Section 77(3)
This is the part that surprises people. For charges created on or after 2 November 2018, there is no rescue after 120 days. The MCA portal physically blocks the filing, and there is no CHG-8 condonation route to reopen it.
The consequence is in Section 77(3): an unregistered charge is void against the liquidator and any other creditor of the company. The lender keeps a contractual right to be repaid, but loses the security that made the loan "secured" in the first place. In a winding-up, they drop to the back of the queue.
PENALTY — Section 86
Beyond the void charge, there's a fine: up to ₹5 lakh on the company and up to ₹50,000 on every officer in default. And wilfully filing false charge particulars exposes the signatories to action for fraud under Section 447 — a different and far more serious category.
(The old "300-day" and "six-month" windows you'll still find in older articles applied only to charges created before 2 November 2018. Don't rely on them for anything current.)
Who files — and what about modification and satisfaction?
Governs this section: Sections 78 & 82; Rule 3 & Rule 8
The company should file CHG-1. But if it doesn't within 30 days, the lender can file it themselves under Section 78 — and recover the fees from the company. Lenders increasingly do exactly this to protect their own security, so "we'll get to it" can mean the bank files first and bills you.
The CHG forms work as a family — know which one a given event needs:
| Form | Used for |
|---|---|
| CHG-1 | Creating or modifying a charge (other than debentures) |
| CHG-9 | Creating or modifying a charge for debentures |
| CHG-4 | Satisfaction of a charge (loan fully repaid) |
| CHG-2 / CHG-3 | Certificate of registration / of modification (issued by ROC) |
| CHG-7 | Register of charges the company keeps internally |
One trap on satisfaction: when a loan is fully repaid, you must file CHG-4 within 30 days of satisfaction. Unlike creation, satisfaction has a softer back-stop — the ROC can allow it up to 300 days on application — but the safe rule is the same: file within 30 days and get the lender's no-dues certificate on file.
What does it cost to be late?
Governs this section: Companies (Registration of Offices and Fees) Rules, 2014
The normal fee is small — ₹200 to ₹600 based on share capital (₹6,000 for a foreign company). The pain is in the multipliers and the ad valorem layer:
| Delay | Additional fee | Ad valorem fee |
|---|---|---|
| Day 31–60 | 3× (small co/OPC) or 6× (others) | — |
| Day 61–120 | (additional fee continues) | 0.025% of the charge, max ₹1 lakh (small co/OPC); 0.05%, max ₹5 lakh (others) |
The ad valorem fee is what makes a late charge filing genuinely expensive: a multi-crore loan can attract the full ₹1 lakh or ₹5 lakh cap just to get on record late.
Don't forget CERSAI
Practitioner's note
ROC registration is not the only registry. Security interests over immovable property (and certain movables) generally also need to be recorded with CERSAI under the SARFAESI framework — a separate filing, separate portal, separate deadline. Companies that diligently file CHG-1 still trip on CERSAI because they assume one registration covers both. It doesn't. Track them as two distinct tasks against the same loan.
Worked example
Mini-case — a ₹2 crore term loan, filed late
A private company (not a small company) creates a hypothecation charge on 1 June for a ₹2 crore facility. Normal fee, on its capital, is ₹600.
- Filed by 1 July (within 30 days): ₹600. Done.
- Filed on, say, 20 July (day ~49): ₹600 + 6× additional fee (₹3,600) = ₹4,200.
- Filed on 10 September (day ~101): ₹600 + ₹3,600 + ad valorem at 0.05% of ₹2 crore = ₹1,00,000 → ≈ ₹1,04,200.
- Filed on 5 October (day 126): not possible. The charge is unregistered and void against creditors. ₹0 of fee, and a worthless security.
The lesson sits in the gap between line one and line four: an afternoon's work versus a permanent hole in the lender's collateral.
Common mistakes
- Counting from the loan sanction, not the charge instrument. The 30 days run from the date of creation/execution of the charge, not the sanction letter or disbursement.
- Treating 120 days as the deadline. It's the outer wall, not the target. Ad valorem fees and the no-condonation cliff make late filing a bad habit.
- Forgetting CERSAI. ROC and CERSAI are separate registries. File both.
- Missing modifications. A change in the charged assets, the secured amount, or the terms is a modification — it needs its own CHG-1 within 30 days.
- Ignoring satisfaction. When a loan is cleared, file CHG-4 within 30 days. A "satisfied" charge left open on the index muddies every future due diligence.
Checklist
- The moment a charge instrument is signed, diarise the 30-day deadline from that date.
- Gather the certified copy of the instrument and, for joint charges, all charge-holder details.
- File CHG-1 (or CHG-9 for debentures), signed by the company and the charge holder.
- Collect the ROC's Certificate of Registration (CHG-2) and file it.
- Make the entry in your internal Register of Charges (CHG-7).
- Complete the separate CERSAI filing where applicable.
- On repayment, get the lender's no-dues certificate and file CHG-4 within 30 days.
FAQ
Is CHG-1 needed for an unsecured loan? No. CHG-1 registers a charge — a security interest over assets. A genuinely unsecured loan creates no charge to register (though you may still report it in DPT-3).
Can the bank file CHG-1 instead of the company? Yes. Under Section 78, if the company doesn't register within 30 days, the charge holder may file and recover the fee from the company. Many lenders do this to protect their priority.
What if I miss the 120-day window? For charges created on or after 2 November 2018, you can't file at all — the charge stays unregistered and is void against the liquidator and other creditors. There's no condonation route.
Does modifying an existing charge need a fresh filing? Yes. A modification — change in secured amount, assets, or terms — is filed in CHG-1 within its own 30-day window.
How long do I keep the charge instrument? The company must preserve the instrument creating the charge for 8 years from the date of satisfaction.
Primary sources
- Sections 77–87, Companies Act, 2013 (registration, modification, satisfaction of charges)
- Rule 3 & Rule 8, Companies (Registration of Charges) Rules, 2014
- Section 86 — penalties; Section 447 — fraud
- Companies (Registration of Offices and Fees) Rules, 2014 — fee slabs
Disclaimer: This article is general information on a fast-changing area of company law, current at the time of writing. It is not legal or professional advice for any specific company. Verify the position against the live MCA rules and consult your company secretary or auditor before filing.