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When a company takes a loan by creating a charge on its assets, it must notify the Registrar of Companies (ROC) through the MCA (Ministry of Corporate Affairs). This is done using Form CHG-1. Similarly, once the loan is repaid or settled, the company must file Form CHG-4 to satisfy or remove the charge from public records. Filing these forms is mandatory under the Companies Act, 2013. It shows a transparent financial record of the company and informs lenders, investors, and other stakeholders about the financial liabilities of the business.
If a company delays or fails to file these forms, it may attract heavy penalties, legal troubles, and difficulties in raising future loans. Therefore, timely filing is very important.
It is compulsory under the Companies Act, 2013 to report charge creation or satisfaction. Filing these forms keeps your company compliant with MCA rules and avoids penalties.
Once a charge is registered, it is recorded in public records through MCA. This enhances transparency for investors, creditors, and the public.
By filing CHG-1, the interest of banks and financial institutions is protected as their charge is officially acknowledged, avoiding possible future disputes.
Banks and investors often check past charge records before granting fresh loans. Proper charge records build financial trust and ease loan approvals.
Delayed or non-filing of CHG-1 or CHG-4 can attract high penalties, sometimes up to ₹1 lakh or more. Timely filing saves such costs.
Filing ensures a clear record of the same asset not being used for multiple loans without disclosing previous charges.
Proper legal and financial documentation reflects professionalism and good governance in the eyes of stakeholders and investors.
In case of multiple loans, timely filing helps establish the priority of charges among different creditors.
Filing CHG-4 helps in the formal closure of loans and removes the lien on company assets, which is crucial for business expansion.
Form CHG-1 must be filed within 30 days of loan/charge creation, and Form CHG-4 must be filed within 30 days of loan repayment. Delayed filing can still be done with additional fees but may require approval from the Regional Director in some cases.
Yes, filing CHG-4 is mandatory to remove the charge from MCA records. If not filed, the company’s records will still show an active charge, which can lead to confusion and complications during future loans or audits.
Non-filing of CHG-1 within 30 days results in a penalty and additional fees. In serious cases, directors may face disqualification, and the loan may not be recognized as secured.
Yes, CHG-1 can be filed within 120 days with additional fees and condonation of delay. After 120 days, approval from Regional Director is needed.
No, CHG-1 is only applicable to corporate loans taken by the company. Personal loans of directors are not covered under company filings.
No. You need a written letter or certificate from the bank confirming that the loan has been fully repaid and charge stands satisfied.
Yes, the fee depends on the company’s capital. There’s also a penalty for late filing. CallmyCA helps you estimate the exact government fee in advance.
No, currently LLPs are not required to file CHG-1/CHG-4. These forms are applicable only to private limited, public limited, and other registered companies under Companies Act.
Technically yes, but due to the technical nature and strict legal format, it's safer and faster to file it through professionals like CallmyCA to avoid rejections or delays.
CallmyCA provides end-to-end assistance, from document preparation to MCA submission. We ensure error-free, fast, and affordable filing of CHG-1/CHG-4 with expert guidance throughout the process.
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