Charge Creation & Satisfaction (CHG-1, CHG-4)
When your company takes a secured loan, the charge must be registered with the Registrar of Companies within 30 days. File the charge creation CHG-1 late and the fee climbs; after 120 days the ROC will not accept it at all. When the loan is repaid, CHG-4 records the satisfaction, again within 30 days. We file both on the MCA V3 portal.
What it is
A charge is the security a company gives a lender over its property or assets: a mortgage on the factory, hypothecation of stock and debtors, or a lien on a vehicle. Registering the charge puts it on the public record, so anyone dealing with the company can see which assets are already pledged.
Chapter VI of the Companies Act, 2013 governs it, with the Companies (Registration of Charges) Rules, 2014. Section 77 requires the company to register the charge in Form CHG-1 (or CHG-9 for debentures) within 30 days of creating it. Section 82 requires Form CHG-4 within 30 days of the loan being paid off or the charge satisfied. Both are filed on the MCA V3 portal and signed by the company and the charge-holder.
Who it applies to
You are taking a secured loan
A term loan, cash credit limit, vehicle loan or loan against property from a bank or NBFC, secured on the company’s assets. Each one needs CHG-1. Changes to the terms or the security are filed as a modification in CHG-1 too.
You are issuing secured debentures
A charge securing a series of debentures is registered in Form CHG-9, not CHG-1.
You have just repaid a loan
Once the loan is closed, the company files CHG-4 so the charge is marked satisfied on the MCA record.
Why it matters
Protects the lender’s security
Under Section 77(3), an unregistered charge is not taken into account by a liquidator or under the Insolvency and Bankruptcy Code, 2016. That is why lenders chase the filing so closely.
Keeps your borrowing record accurate
Open charges show on your company’s MCA master data. Picture a Faridabad trading company that repaid its cash credit limit in 2023 but never filed CHG-4. Its master data still shows the charge, and the next lender asks why.
Clears the way to closure
A company with charges pending satisfaction cannot use the fast-track route to close a private limited company. CHG-4 has to be done first.
Documents required
For CHG-1 or CHG-9
- Instrument creating or modifying the charge: loan agreement, hypothecation deed or mortgage deed
- Sanction letter with the amount secured and the terms
- Details of the property or assets charged
- Board resolution approving the borrowing and security
For CHG-4
- No-objection certificate or letter of satisfaction from the lender
- Charge ID and date of creation from the MCA record
- Date and amount of the final repayment
Signatures
- Valid digital signature certificate (DSC) of a director or the company secretary
- DSC of the lender’s authorised officer, as charge-holder
CHG-1 late fee at a glance
| When filed (from creation) | Small company or OPC | Other companies |
|---|---|---|
| Within 30 days | Normal fee | Normal fee |
| 31 to 60 days | 3× the normal fee | 6× the normal fee |
| 61 to 120 days | 3× the normal fee plus 0.025% of the amount secured (maximum ₹1 lakh) | 6× the normal fee plus 0.05% of the amount secured (maximum ₹5 lakh) |
| Beyond 120 days | Not accepted by the ROC; condonation from the Regional Director in Form CHG-8 under Section 87 | |
Here is the catch: the ad valorem part is what hurts. Take a mid-sized Faridabad manufacturer with a large term loan that misses both the 30-day and 60-day marks: the fee is no longer a few hundred rupees but a percentage of the loan, up to ₹5 lakh.
If the company does not register within 30 days, Section 78 also lets the charge-holder apply directly. The ROC gives the company 14 days to register it or object, and the lender can recover the fees it paid from the company.
How it works
Collect the loan papers on the day of signing
The 30 days run from the date the charge is created, usually the date the security documents are executed. We take the sanction letter and deeds as soon as they are signed.
Prepare CHG-1 or CHG-9 from the deed
We enter the amount secured, the assets charged, the terms and the charge-holder’s details, and attach the instrument.
Get the company and the lender to sign
A director signs for the company, and the lender’s officer signs as charge-holder. In practice, this is where most delays happen, so we follow up with the bank branch until it is signed.
File and update the register of charges
Once filed and approved, the Registrar issues a certificate of registration. We record the charge in your register of charges under Section 85.
File CHG-4 when the loan is closed
On final repayment, we get the lender’s no-objection letter and file CHG-4 within 30 days, so the charge is marked satisfied.
Timelines
Register the charge within 30 days
Register the charge within 30 days of its creation or modification. With additional fees, the ROC accepts filings up to 60 days, and with ad valorem fees up to 120 days.
Report satisfaction within 30 days
Report satisfaction within 30 days of full repayment. The Registrar may allow it up to 300 days with additional fees.
Allow 14 days for the lender’s reply
On CHG-4, the Registrar may give the charge-holder up to 14 days to show cause why satisfaction should not be recorded. This step is skipped where the charge-holder has signed the form.
What happens if you miss it
You face a ₹5 lakh penalty
For a default under Chapter VI, the company is liable to a penalty of ₹5 lakh and every officer in default to ₹50,000. Wilfully false information attracts action under Section 447.
Fees climb, then the door closes
CHG-1 costs 3× or 6× the normal fee after 30 days, plus an ad valorem fee after 60 days. Past 120 days, only the Regional Director can condone the delay.
The lender loses priority in a liquidation
A liquidator or insolvency professional ignores an unregistered charge, so the lender is left unsecured.
Frequently asked questions
What is the time limit for filing CHG-1?
Thirty days from the date the charge is created. Under Section 77(1), the ROC can accept a late filing up to 60 days with additional fees, and up to a further 60 days with ad valorem fees, so 120 days in all. Beyond that, the company needs condonation from the Regional Director under Section 87. File in the first week after signing and none of these extra costs arise.
Who signs Form CHG-1?
Both the company and the charge-holder sign it. Section 77(1) requires the particulars to be signed by the company and the person in whose favour the charge is created. A director or company secretary signs for the company, and the bank or NBFC’s authorised officer signs as charge-holder, each with a DSC. We coordinate with the lender’s branch so the form is signed well inside the 30 days.
What is the government fee for CHG-1 and CHG-4?
The normal fee depends on authorised capital: ₹200 below ₹1 lakh, ₹300 for ₹1–5 lakh, ₹400 for ₹5–25 lakh, ₹500 for ₹25 lakh–₹1 crore and ₹600 at ₹1 crore and above. A late CHG-1 costs 3× or 6× this fee, plus ad valorem fees after 60 days. A late CHG-4 costs 2× to 12× the normal fee. Filed on time, the cost stays at the normal fee.
When is CHG-9 used instead of CHG-1?
CHG-9 is used for a charge securing debentures. When a company issues a series of secured debentures, the charge in favour of the debenture holders or their trustee is registered in CHG-9. All other charges, such as bank loans, hypothecation and mortgages, go in CHG-1. The 30-day rule under Section 77 applies to both. If you are unsure which form fits your instrument, we will check it before filing.
What if the company forgets to register the charge?
The lender can register it. Under Section 78, if the company fails to file within 30 days, the charge-holder may apply to the Registrar with the instrument. The Registrar gives the company 14 days to register it or show cause. The lender can then recover the fees it paid from the company. The company stays liable for the default either way, so file on time yourself.
How long does a company have to file CHG-4 after repaying a loan?
Thirty days from the date of full repayment or satisfaction, under Section 82(1). The Registrar may allow intimation up to 300 days with additional fees, charged at 2× to 12× the normal fee depending on the delay. Beyond 300 days, condonation in Form CHG-8 is needed. Ask the bank for its no-objection letter on the day you close the loan and the form can be filed that week.
Is a vehicle loan taken by the company a charge?
Yes, if the vehicle is hypothecated to the lender as security, it is a charge on the company’s asset and needs CHG-1 within 30 days. This catches many small companies, because the dealer and lender handle the paperwork and nobody tells the company secretary. When the loan is repaid, CHG-4 follows within 30 days. Send us the loan agreement as soon as the car is delivered and we take it from there.
What is the register of charges?
It is the company’s own record of every charge on its property, kept at the registered office under Section 85. Copies of the instruments creating the charges are kept with it. Members and creditors can inspect the register and instruments without any fee; others may inspect on paying the prescribed fee. We update the register each time a CHG-1 or CHG-4 is approved, so it always matches the MCA record.
What is the penalty for not registering a charge?
Under Section 86(1), the company is liable to a penalty of ₹5 lakh and every officer in default to ₹50,000. Separately, Section 77(3) means a liquidator or insolvency professional will not take an unregistered charge into account, which hurts the lender. Wilfully false information in a charge form attracts action for fraud under Section 447. Filing within 30 days keeps all of this off the table.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
The normal government fee for CHG-1 and CHG-4 depends on your authorised capital:
| Authorised capital | Normal fee per form |
|---|---|
| Below ₹1 lakh | ₹200 |
| ₹1 lakh to below ₹5 lakh | ₹300 |
| ₹5 lakh to below ₹25 lakh | ₹400 |
| ₹25 lakh to below ₹1 crore | ₹500 |
| ₹1 crore and above | ₹600 |
Late CHG-1 fees are shown in the table above. A late CHG-4 costs 2× to 12× the normal fee.
Ready to begin?
Send us the sanction letter or the bank’s no-objection letter, and we will file your CHG-1 or CHG-4 well inside the 30 days.