Charge filing — Form CHG-1 and the 30-day MCA clock for loans
Every time a company creates a charge — mortgage on land, hypothecation of inventory, pledge of shares — Form CHG-1 must reach the MCA within 30 days. The charge register at the ROC is the public record lenders and acquirers rely on. Miss the 30-day window and the late-fee cascade hits the same 12× ceiling as DIR-12. Here's the workflow.
What "charge" means here
Sec 2(16) defines charge as any interest or lien created on the property or assets of a company as security for repayment of debt. Common charge types:
- Mortgage — typically on immovable property (land, building) as security for a long-term loan
- Hypothecation — on movable assets (machinery, inventory, receivables) with possession remaining with the company
- Pledge — on movable assets where the lender has possession (typically shares, gold, securities)
Cash credit limits, working-capital lines, term loans, debentures, bonds — all secured by charge — trigger CHG-1.
The 30-day clock — Sec 77
From the date of creation of charge (i.e., execution of charge document — mortgage deed, hypothecation agreement, debenture trust deed), Form CHG-1 must be filed within 30 days. The clock starts from creation, not from disbursement of loan.
Filed by the company (default) with consent of the lender. Lender can also file directly under Sec 78 if the company doesn't (rare but available — protects lender).
Documents to attach to CHG-1
- Copy of the charge document (mortgage deed / hypothecation deed / debenture trust deed / pledge agreement)
- Particulars of the secured creditor — name, address, PAN
- Particulars of the property — description, value, location
- Schedule of secured loan — amount, rate of interest, tenure, repayment terms
- Board resolution authorising the creation of charge
- Member resolution (if Sec 180(1)(c) — borrowing limit) if applicable
Late-fee cascade (Companies (Registration Offices and Fees) Rules)
| Days late | Additional fee multiplier |
|---|---|
| Up to 15 | 1× normal fee |
| 16-30 | 2× |
| 31-60 | 4× |
| 61-90 | 6× |
| 91-180 | 10× |
| > 180 | 12× |
Same scale as DIR-12. Base CHG-1 fee depends on share capital; typically ₹300-₹600 for Pvt Ltd. So a 6-month-late filing = ₹4,000-₹7,000.
The Sec 78 lender's direct-filing route
If the company fails to file CHG-1 within 30 days, the secured creditor can file directly within 14 days of the 30-day expiry. The creditor files Form CHG-1 (same form, different signatory) + claims the right to recover filing costs from the company.
This route exists primarily to protect lenders — without registered charge, the lender's security ranking against other creditors is weaker (charges must be registered to be enforceable in insolvency under IBC).
CHG-9 — for debentures
For creation of charge on issue of debentures, Form CHG-9 is used (variant of CHG-1 specific to debenture issues). Same 30-day clock, same documentation requirements, with debenture trust deed mandatory.
CHG-4 — satisfaction of charge
When a loan is fully repaid and the charge is to be released:
- Lender issues "No Dues Certificate" / "Letter of Satisfaction"
- Company files Form CHG-4 within 30 days of repayment / satisfaction
- Attach: letter of satisfaction from lender + repayment proof
- ROC removes the charge from the register
Without CHG-4, the charge remains on public record — appearing in due-diligence searches. This affects: new loan applications, M&A due diligence, share-sale exits. We've seen acquirers reduce purchase price citing "uncleared charges on MCA register" that were actually long-paid.
Modification — CHG-1 again
If the terms of an existing charge change (increase / decrease of loan amount, change of rate, change of secured property, change of secured creditor), file CHG-1 (modification) within 30 days. Same documentation as fresh charge but indicating modification.
The "charge register" maintained by the company
Apart from MCA filing, every company maintains its own charge register under Sec 85 — Form CHG-7. Should record:
- Each charge: type, date, amount, secured property
- Modifications
- Satisfactions
The internal register is checked by auditors annually + during scrutiny of any major transaction (M&A, fund raise). Inconsistencies between internal register and MCA filings are a red flag.
📌 The "Series A charge" trap: When a company raises Series A funding from a VC fund, the convertible-note / preference-share arrangement sometimes includes a charge on assets (anti-dilution etc.). Founders often miss this — they think it's "just equity". If the term sheet creates any security over company assets, CHG-1 is needed. Check the term sheet with counsel.
Audit-side scrutiny
Statutory auditors (Form 3CD clause for material loans / charge register) cross-check:
- Internal CHG-7 register vs MCA21 master data
- Loan ledger (bank statements) vs charges registered
- Outstanding loan balances vs unsatisfied charges
Missing CHG-1 or unsatisfied (CHG-4 not filed) charges = audit comment in the report. Companies Act Sec 164(2) consequences for repeat defaults.
The Finclar take
Charge filing is procedurally simple but operationally easy to drop. The pattern we see: company takes a working-capital loan in March, signs all documents, CFO assumes lawyer / banker filed CHG-1, no one actually files, May-July goes by, and the auditor catches it at year-end. By then it's 4-6 months late at 4-6× fees. The fix: every new loan disbursal must come with a CHG-1 acknowledgement attached to the loan file. No CHG-1, no loan close. Five extra minutes per loan; saves five extra hours per audit cycle.
S A Mohammed Inamul Hasan · Team Member · ROC / MCA + Automation & Web
Leads Finclar's ROC/MCA practice. Maintains compliance calendars for 80+ active companies and tracks 200+ MCA form filings annually. View full bio & archive →