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Ashish Karandikar (Advocate)     30 March 2010

Charge creation as per the Companies Act, 1956

Is there any provision to register a charge of 'Bank Gurantee', with the Registrar of Companies (ROC), like other charge, u/s. 125 of the Companies Act? (It is actually a non-fund based facility.)

Whose liability is this, to register this charge with ROC? and

What procedure to be followed to register / note / create such charge, regarding the Type of Charge, the Security, Terms of repayment, Rate of Interest, etc.?

Advt. Ashish Karandikar

Mobile #: +91 0 9850903959



Learning

 10 Replies


(Guest)

in case of charge on any property of the Company, company shall get it registered with RoC. 

CA Adarsh Agrawal (CMD of SHAYVIDZ Group)     30 March 2010

No need to register the charge in case of Corporate guarantee IF NO ASSETS HAS BEEN GIVEN AS GUARANTEE UNDER HYPOTHECATION AGREEMENT.

 

Reason behind that is, NO ASSET (MOVABLE/IMMOVABLE) IS HYPOTHECATED.

SO NO CHARGE ON ANY OF THE ASSETS OF THE COMPANY.

 

Ashish Karandikar (Advocate)     31 March 2010

My dear Friends (Mr. Nirav and Learner),

I request you to go through the question that I've raised.

I clearly mentioned therein that its a 'BANK GUARANTEE', and not else.

Further, I sought the PROCEDURE for the same.

Please keep the eyes, ears and mind keep open. (Sorry.. if these words hurts anybody)

Regards,

Advt. Ashish Karandikar

Mobile #: +91 0 9850903959



(Guest)

if u dont like the answer or not satisfied, ignore. dont use these words again , atleast for me. U have no right. U r not paying me anything for this. 


(Guest)

also refer both replies again. u should b wise enough to understand. 

Ashish Karandikar (Advocate)     31 March 2010

My dear friend,

Thanks for the (angry) reply.

I think you might don't know about the Banking procedure, or may you missing somthing. It's alright..

I w'ld like to make some informative discussions with you about the term 'Bank Gurantee' (BG), that

- the BG is a Non-fund based Credit Facility provided by the Bankers.

- for which they ask for depositing actual amount equal to BG Limit (either directly transfer from their Current Account or else)

- it is purely interchangable Credit facility within other Credit Facilities santioned to their specific customer

- and lastly they ask for the security which is in the form of the deposited amount

(I know and also agree with you that in case of Corporate gurantee, as per the Banker's terms & conditions you must provide the charge over the assets of the Company)

But in case, their is no such assets, i. e. the deposited amount either from the own pockets of the compny or out of the other Credit facilities (loans) disbursed to the company by the Banker.

Please try to understand this situation n guide. (if possible, I c'ld pay you for that, honestly)

Regards,

Advt. Ashish Karandikar

Mobile #: +91 0 9850903959

Suresh CSLLM (Service)     03 April 2010

There are two meaning of 'BANK Guarantee', one Bank is giving guarantee and other a Individual/company giving garantee to Lending Bank.

Whether any charge to be registered or not with RoC under the Companies Act, Banking system is irrelvant.

The criteria is if any charge / mortgage / security is created over the property of a Company needs to be registered with RoC.  section 125 of the Companies Act 1956 per se is very clear.

Suresh

 

 

CA Adarsh Agrawal (CMD of SHAYVIDZ Group)     16 April 2010

Originally posted by :Ashish Karandikar
"


My dear Friends (Mr. Nirav and Learner),

I request you to go through the question that I've raised.

I clearly mentioned therein that its a 'BANK GUARANTEE', and not else.

Further, I sought the PROCEDURE for the same.

Please keep the eyes, ears and mind keep open. (Sorry.. if these words hurts anybody)

Regards,

Advt. Ashish Karandikar

Mobile #: +91 0 9850903959

My dear friend,

Thanks for the (angry) reply.

I think you might don't know about the Banking procedure, or may you missing somthing. It's alright..

I w'ld like to make some informative discussions with you about the term 'Bank Gurantee' (BG), that

- the BG is a Non-fund based Credit Facility provided by the Bankers.

- for which they ask for depositing actual amount equal to BG Limit (either directly transfer from their Current Account or else)

- it is purely interchangable Credit facility within other Credit Facilities santioned to their specific customer

- and lastly they ask for the security which is in the form of the deposited amount

(I know and also agree with you that in case of Corporate gurantee, as per the Banker's terms & conditions you must provide the charge over the assets of the Company)

But in case, their is no such assets, i. e. the deposited amount either from the own pockets of the compny or out of the other Credit facilities (loans) disbursed to the company by the Banker.

Please try to understand this situation n guide. (if possible, I c'ld pay you for that, honestly)

Regards,

Advt. Ashish Karandikar

Mobile #: +91 0 9850903959
 

"


Dear Ashish... !

 

Let me explain you further that what i had replied in my earlier post is how to be applied in ur case.

   

There must be an specific asset for which form 8 should be filed.

 

In Corporate guarantee, there is no specific assets as it is mostly given on networth basis.

 

In bank guarantee, the company is giving money. Now ask one question to yourself that whether MONEY is as ASSET for the Purpose of CHARGE u/s 125 ?  In my opinion, the answer is NO.. so there is no charge on asset & form 8 is not required to be filed. Lets assume if the answer is yes, it will become pledge of Money, thus, then also it is not required to be registered as per Sec125.

 

I think you get my point that THERE MUST BE AN SPECIFIC ASSET GIVEN UNDER HYPOTHECATION FOR THE PURPOSE OF APPLICABILITY OF SECTION 125.

mpdurai (CM)     01 March 2012

If Bank guarantee is issued by Bank on the strength of the Pledge of fixed deposit it need not be registered with ROC as change on immovable (not being a pledge) alone needs to be registered.

mpdurai (CM)     01 March 2012

A correction in the above.

If Bank guarantee is issued by Bank on the strength of the Pledge of fixed deposit it need not be registered with ROC as charge on movable (not being a pledge) alone needs to be registered, as per sec 125 (4) (e) of companies act.

 

It may be read as above


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