Alteration of Charges
📌 Alteration of Charges under Company Law (Companies Act, 2013)
✅ What is a Charge?
A charge is a form of security created on a company’s assets or properties to secure a debt or loan.
Charges can be fixed (on specific assets) or floating (on general assets).
🔄 Alteration of Charges
Alteration of charges refers to any modification or change in the terms, conditions, or particulars of a previously registered charge with the Registrar of Companies (ROC).
This may include:
Change in the amount secured
Change in the terms of repayment
Modification of assets covered under the charge
Addition or removal of security
Change in rate of interest or repayment schedule
📜 Relevant Provisions:
Section 77 to 87 of the Companies Act, 2013
Rule 3 of the Companies (Registration of Charges) Rules, 2014
🛠️ Procedure for Alteration of Charges
| Step | Action |
|---|---|
| 1️⃣ | Board Resolution to approve modification of the charge. |
| 2️⃣ | Obtain No Objection Certificate (NOC) from the charge-holder (usually a bank or lender). |
| 3️⃣ | File Form CHG-1 (for other than debentures) or CHG-9 (for debentures) with ROC. |
| 4️⃣ | Submit the form within 30 days of alteration. |
| 5️⃣ | Attach relevant documents: copy of modified charge instrument, board resolution, NOC, etc. |
| 6️⃣ | ROC verifies and registers the modification. A Certificate of Modification of Charge is issued. |
🕓 Time Limit for Filing
Within 30 days from the date of modification.
Can be extended by Registrar up to 270 days (with additional fees and reasons).
💰 Fees Involved
Filing fees vary based on company type and amount secured.
Additional fees apply if filed beyond the standard time frame.
❗ Consequences of Non-filing
The charge will be considered void against the liquidator or creditors of the company.
The company and officers may be liable for penalties under Section 86 of the Companies Act, 2013.
The company may lose its secured creditor status in case of liquidation.
📎 Documents Required for CHG-1/CHG-9
Copy of the instrument modifying the charge
Board Resolution
NOC from charge-holder
Any other supporting documents
📘 Example:
ABC Ltd. had created a charge for ₹10 crores on plant & machinery. Later, the loan amount increased to ₹12 crores, and the repayment period was revised. ABC Ltd. must file a modification of charge with the ROC using Form CHG-1.
Do write to us if you need any further assistance.
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