Charges

Charge
The term ‘charge’ is • The power to create
defined as the transfer of charge is conferred by the
an interest (right) in the memorandum or article
assets of the company for of the company. In case
the purpose of securing this power is not provided
the repayment of loan, there ,it may also be done
which the lender may by a special resolution.
enforce through court if
his amount of loan isn't
repaid. A company is
allowed to give security
for the loan by charge on
all or any of its property.
 Kinds of charge
The charges which a company
may create on its assets are of
two kinds:
(1) Fixed Charge : its the
charge which is created on the
definite and ascertained asset
of the company ,a charge on
the land and building of the
company. A fixed charge is
always on the assets of the
company which are more or
less of fixed nature, such as
heavy machineries attached to
the land.
Its also known as specific
charge. Mortgage is the
instance of fixed charge. The
consequence of fixed charge is
that the company is prevented
from dispatching that property
without the consent of the
holders of the charge. The
company can transfer the
property after the holder must
be paid first whatever is due to
him.
 Kinds of charge
(2) Floating Charge : its the However, if the property
charge which is created charged is transferred to
on the class of property the money-lender, the
which is constantly charge will not be a
changing ,stock in trade, floating one as the
raw material. The company will not be in a
company can deal with position to deal with the
the property in the property in the ordinary
ordinary course of course of business.
business so charged Debentures are usually
without the consent of secured by a floating
the holder of the charge. charge on the asset of the
company.
 Registration of charges
U/s. 159 of the Company (d) charge on any book of
Act, the following charges accounts
must be registered with (e) a floating charge on the
the Registrar:-- undertaking
(a) charge made to secure
any debenture
(b) charge on uncalled
capital
(c ) charge on any
immoveable property
 Registration of charges
The prescribed particulars of
the charge together with the
instrument by which the
charge is created or evidence
on a copy thereof verified in a
manner prescribed in law are
required to be filed with the
Registrar within twenty one
days after the date of its
creation paying required fees.
upon the failure of registration
within the prescribed period,
the Registrar may extend
another 21 days being
satisfied with the reason of
delay .. where any charge on
property has been registered
,any person acquiring such
property shall be deemed to
have acquired the same with
notice of the charge. Such
notice is from the date of
registration of the charge with
the Registrar u/s 159(2).
 Effect of Non-registration
(i) The charge shall be void against
the liquidator and any creditor
of the company
(ii) any amount secured by the
charge shall be immediately
payable.
(iii) the debt in respect of which
the charge was created will be
valid as an unsecured debt and
charge holder shall be
considered as unsecured
creditor.
(iv) if a company makes any default
in filing with the Registrar for
registration the particular of any
charge created by the company
then the company and the
officers involved with such
defaults shall be liable to a fine
not exceeding Tk. 1000 for
everyday during which the
default continues. [S.173(1)]
(v) The registration of any charge
may also be effected on the
application of any interested
party who shall be entitled to
recover from the company the
amount of any fees properly paid
by him.
 certification of charge
• U/S 165 of the Company U/S 166 provides that a
Act,1994 ,when the copy of every certificate
registration of any charge of registration shall be
is completed ,the endorsed on every
Registrar shall give a debenture on certificate
certificate of registration of debenture stock which
to the charge holder is issued by the company.
stating the amount
secured by the charge
and it shall the conclusive
evidence that the legal
requirements have been
complied with.