MCA Revised Timelines and Fees for Charge Filing

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In the context of business, a charge is the creation of an entitlement to place security over an organisation’s assets to satisfy outstanding debt or other financial obligations. “In this case, if the company does not honour the contract, the creditor who holds the charge on the secured asset can reclaim the asset to recover their dues”. These charges are required to be registered with the Ministry of Corporate Affairs for a predetermined period of time to ensure transparency and to guard against any financial harm to stakeholders.

The MCA changed the terms that apply to being accused and the penalty just in time. Companies had a grace period of thirty days before charges could be registered or modifications could be made. They will have to pay extra and negotiate with the MCA for delay forgiveness, which allows them to file after the deadline if they fail to meet the seven-day deadline after receiving the notice. As a result, this procedure may be an intricate and expensive one. In this article, we will discuss the revised timelines and fees for charge filing.

Pre-Revision Timelines and Fees:

Pre-revision Timelines:

Businesses had 30 days to file a charge with the MCA after it was created or modified.

Pre-revision Charges:

If the filing is completed within 30 days, there are no further costs.
There are additional costs if the delay is longer than thirty days.
The particular fees were determined as a percentage of the fee payable for timely filing and varied according to the length of the delay.
Companies may also have had to pay extra fees if they had to submit a second application for a “condonation of delay” to register the charge after a specific amount of time had passed.

Acceptance Of Payment:

Within 30 days of its formation, a company must file a charge with the Registrar in accordance with Section 77 of the Companies Act, 2013. Nonetheless, upon payment of any additional fees that may be required, the Registrar may permit registration of the charge within 60 days after its establishment. The Registrar may grant an additional 60 days (30+30+60 days) if the Company does not register the charge within the allotted 60 days, provided that the applicable additional and Ad Valorem fees are paid.

Satisfaction of the Charge:

Section 82 of the Companies Act of 2013 stipulates that the company must notify the Registrar of any payment or satisfaction of charges within 30 days of the date of such payment or satisfaction.
The corporation has 300 days to file the satisfaction of charge, plus any additional fees that may be required, if it doesn’t do so within the allotted 30 days.
Additionally, the company must first file a request for delay forgiveness with the regional director and only then may it file a satisfaction of charge with the registrar if the charge is not satisfied within 300 days.

Increased Additional Fees for Recurring Filing Requirement Defaults:

With effect from July 1, 2022, it may become costly for Indian corporations to neglect to comply with the reporting requirements under the Corporations Act, 2013 (“Companies Act”) with the Ministry of Corporate Affairs (“MCA”). As of right now, the MCA levies an extra fee for forms filed with them after the deadlines set forth in the Companies Act. This fee can be paid either as a daily additional filing fee for specific forms, such as annual returns and financial statements or as a multiple of the regular fees up to a maximum of 12x of the regular filing fee.

The MCA has now instituted a concept known as “Higher additional fee in certain cases,” which entails an additional price that can be up to eighteen times the standard filing fees (“Higher Additional Fees”) for businesses that consistently miss deadlines for fulfilling certain reporting obligations. The MCA is attempting to incentivize enterprises that tend to procrastinate form filings to concentrate on meeting the deadlines for reporting regulatory compliances under the Enterprises Act by implementing the Higher Additional Fees.