MCA CHG-1 Charge Creation Registration

A MCA CHG-1 Charge Creation Registration in India captures the information the relevant authority needs for the matter it concerns and creates a dated written record of what was submitted.

Under Section 77 of the Companies Act 2013, a 'charge' includes any form of security interest — registered mortgage, equitable mortgage by deposit of title deeds, hypothecation, pledge, assignment by way of security, lien, or floating charge — created by a company on its property or assets in favour of a charge-holder (creditor or lender). The obligation to register lies with the company; if the company fails to file CHG-1 within 30 days, the charge-holder (bank or NBFC) may file it on the company's behalf. State Bank of India, HDFC Bank, ICICI Bank, Axis Bank, and virtually all institutional lenders in India require CHG-1 registration as a standard loan covenant.

The critical consequence of non-registration is prescribed under Section 77(3) of the Companies Act 2013: an unregistered charge is void against the liquidator and any creditor of the company. This means that if the company enters insolvency proceedings before the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code 2016, a lender with an unregistered charge ranks as an unsecured creditor — losing the priority that registered charge-holders enjoy over the charged assets. This makes CHG-1 registration a fundamental credit protection measure for every secured lender.

The ROC maintains a public Register of Charges under Section 81 of the Companies Act 2013. Every CHG-1 filing is publicly accessible on the MCA21 portal under the company's CIN, allowing prospective lenders, investors, and buyers to conduct charge searches before advancing credit or completing transactions. Due diligence teams in mergers and acquisitions, private equity investments, and real estate transactions routinely examine the MCA21 charge register as part of their legal review.

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (SARFAESI Act) provides registered charge-holders — banks and specified financial institutions — with the power to enforce their security interests without court intervention. SARFAESI enforcement requires that the security interest be registered, making CHG-1 registration under the Companies Act 2013 a prerequisite for SARFAESI enforcement rights. The Central Registry of Securitisation Asset Reconstruction and Security Interest (CERSAI) provides a parallel security interest registration system for non-corporate borrowers and equitable mortgages — CHG-1 under MCA is specific to company charges.

Form CHG-1 must be filed within 30 days of every occasion on which a company creates a charge — a security interest — on any of its assets in favour of any creditor or lender, regardless of the asset type or the amount secured.

Manufacturing companies in Pune, Ahmedabad, Chennai, and Surat that obtain term loans from State Bank of India, Bank of Baroda, or Punjab National Bank secured by hypothecation of plant and machinery, mortgage of factory premises, and floating charge on current assets must file CHG-1 for each security document executed. Large manufacturing facilities may have multiple CHG-1 registrations covering different classes of assets pledged to different lenders or tranches of the same facility.

Real estate developers — registered under RERA (Real Estate (Regulation and Development) Act 2016) with MahaRERA, RERA Karnataka, RERA Telangana, or other state RERA authorities — that mortgage project land and construction assets to housing finance companies such as HDFC Ltd, LIC Housing Finance, or PNB Housing Finance must register the mortgage as a charge through CHG-1. RERA regulations also require disclosure of encumbrances on project land to home buyers, and CHG-1 registration is the official record of such encumbrances.

Startup companies and technology ventures that obtain venture debt from specialist lenders — Trifecta Capital, InnoVen Capital, Alteria Capital, or Stride Ventures — secured by hypothecation of intellectual property, receivables, and equipment, must register the charges through CHG-1. Venture debt agreements specifically require CHG-1 registration as a condition precedent to disbursement in most term sheets.

Non-Banking Financial Companies (NBFCs) and microfinance institutions (MFIs) that obtain refinancing from NABARD, SIDBI, or National Housing Bank (NHB) secured by their loan portfolio (assignment of receivables) must register the assignment charge through CHG-1, even though the assigned receivables are movable assets not typically associated with traditional mortgage-type charges.

When a company fully repays a loan and obtains a No Objection Certificate (NOC) from the lender, Form CHG-4 (Satisfaction of Charge) must be filed within 30 days to update the ROC's charge register and clear the company's charge record for future financing and due diligence purposes.

Form CHG-1 filed on the MCA21 portal must contain the following particulars to be accepted by the ROC, to create a valid public record of the security interest, and to protect the charge-holder's priority against other creditors and the liquidator.

The company identification section records the Corporate Identification Number (CIN), full registered company name, and registered office address. The CIN links the CHG-1 filing to the company's master data on MCA21, where all prior and current charges are publicly visible.

The date of creation of the charge records the exact date (in DD/MM/YYYY format) on which the charge instrument — the loan agreement, mortgage deed, hypothecation agreement, or deed of assignment — was executed and the charge legally came into existence. This date triggers the 30-day filing deadline. Any dispute about whether CHG-1 was filed in time is resolved by reference to this date.

The nature of the charge section classifies the security interest: mortgage (registered or equitable), hypothecation, pledge, floating charge, or assignment. For a floating charge — a charge that floats over all present and future assets of the company without attachment to any specific asset until crystallisation on default — the form notes the floating nature and the crystallisation events. For a first charge versus second charge (pari passu or subordinated), the rank of the charge must be stated. Multiple lenders holding pari passu charges execute an Inter-Creditor Agreement (ICA) and the charge form notes the pari passu sharing.

The amount secured records the total principal amount of the loan or financial facility secured by the charge, in Indian Rupees. For term loans, this is the sanctioned loan amount. For working capital facilities (cash credit, overdraft), this is the sanctioned limit. For non-fund-based facilities (bank guarantees, letters of credit), the contingent liability amount is recorded.

The charge-holder (lender) identification section records the full legal name of the charge-holder — State Bank of India (IFS Code and branch), HDFC Bank Limited (branch and account details), or the NBFC's registered name and CIN. Foreign charge-holders must provide their registration details from their country of incorporation. The charge-holder's PAN and address are recorded as required by the MCA21 form.

The property and assets charged section is the most detailed part of the form. For immovable property (land, factory, building): survey number, municipal number or CTS number, area in square metres, taluka, district, state, and the registration details of the mortgage deed (if registered at the Sub-Registrar's office under the Registration Act 1908). For movable assets: category description (plant and machinery, inventory, book debts, intellectual property), approximate value, and the nature of the hypothecation. For intellectual property: IP registration numbers, type (patent, trademark, copyright), and jurisdiction.

The instrument creating the charge — the executed loan agreement, mortgage deed, or hypothecation letter — must be attached as a PDF annexure. Where the instrument is in a language other than English or Hindi, a certified English translation must be provided. For equitable mortgages (deposit of title deeds), the memorandum of deposit and the title deed details are described.

The digital signatures of both the company's director (using a Class 3 DSC registered on MCA21) and the charge-holder's authorised representative complete the filing. The ROC processing generates a Certificate of Registration of Charge — this certificate, with the assigned charge identification number, is the lender's primary evidence of their registered security interest in the company's assets. The forms-legal.com MCA CHG-1 Charge Creation Registration template covers the mandatory elements under Companies Act, 2013.