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 intricate and expensive. 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 from filings to concentrate on meeting the deadlines for reporting regulatory compliances under the Enterprises Act by implementing the Higher Additional Fees.
MCA Revised Timelines and Fees for Charge Filing
Higher extra fees will be owed if, within 365 days of the previous such belated e-form filing date for which an additional fee or higher additional fee was assessed, e-form INC-22 or e-form PAS-3 is not filed on two or more occasions.
An additional fee and a higher additional fee shall be levied in the following prescribed sequence for late filing of forms, except for those related to increases in nominal share capital, forms under Section 92 for Section 137 of the Companies Act, or forms for filing charges:
- If there is a delay of up to 15 days ( according to Section 139 and Section 157 of the Companies Act 2013), an additional fee will be a time-normal fee, and a higher additional fee will not be charged.
- If there is a delay of more than 15 days and but up to 30 days ( according to Section 139 and Section 157 of the Companies Act) and 30 days in remaining forms, additional fees will be two times of normal filing fees, and the higher additional fee will be charged three times of applicable normal filing fees (for specified cases).
- If there is a delay of more than 30 days and up to 60 days the additional fees will be four times of normal filing fees and the higher additional fee will be charged six times of applicable normal filing fees (for specified cases).
- If there is a delay of more than 60 days up to 90 days, additional fees will be six times the normal filing fee, and the higher additional fees will be charged nine times the applicable normal filing fees (for specified cases).
- If there is a delay of more than 90 days and up to 180 days, additional fees will be ten times the normal filing fees, and the higher additional fee will be charged fifteen times the applicable normal filing fees (for specified cases).
- If there is a delay of more than 180 days, then additional fees will be 12 times of normal filing fees, and the higher additional fees will be charged 18 times the applicable normal filing fees (for specified cases).
Related Services