Section 77 of the Companies Act, 2013
Section 77 of the Companies Act, 2013 – Duty to Register Charges, etc.
📘 Bare Act Summary:
Section 77(1):
Every company creating a charge (like a mortgage or lien) on its:
Movable or immovable property,
Tangible or intangible assets,
Undertaking, etc.,
whether within or outside India, shall register the charge with the Registrar of Companies (RoC) within 30 days of its creation, along with the prescribed documents and fees.
Explanation of Terms:
Charge = A right or interest created on a company’s assets to secure a loan or performance of an obligation.
Example: When a company takes a loan from a bank and offers its assets as security, the bank creates a charge on those assets.
Section 77(1) Proviso – Extension of Time:
Registrar may allow registration up to 300 days (30 days + additional period with additional fees and justification).
If not registered within that time, the company may still file within 6 months from the date of creation, but only after seeking Central Government’s approval (as per amendment via Companies (Amendment) Act, 2019).
Section 77(2):
If the company fails to register the charge, then:
The person in whose favor the charge is created (e.g., the bank) can register it.
The Registrar will give notice to the company before registering such a charge.
Section 77(3):
If a charge is not registered:
It is not valid against the liquidator or any other creditor of the company.
Meaning: In case of winding up, an unregistered charge holder may not get priority.
Section 77(4):
Nothing in this section affects:
The contract or obligation of the company regarding the repayment of the loan or obligation secured by the charge. (i.e., non-registration doesn’t cancel the loan agreement – it only affects its enforceability against third parties).
✅ Key Points to Remember:
Mandatory registration of charges.
Failure may lead to loss of security rights in insolvency or liquidation.
Timelines: 30 days normally, extendable up to 300 days (with fees), or up to 6 months with CG approval.
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