The Statutory Register
Section 85 requires every company to keep at its registered office a register of charges in the prescribed form, containing particulars of all charges affecting the property or assets of the company. The register must record the charge creation, modification, and satisfaction, and must be updated as each event occurs.
The Inspection Right
The register of charges and the instruments of charge are open for inspection during business hours by any member or creditor without payment of fees. The inspection right is not subject to the board’s discretion. A company that denies inspection, or maintains the register at a place other than the registered office without authority, is in contravention.
The Rectification Power Under Section 87
The Central Government has the power to order rectification of the register of charges where an omission or misstatement is established. The rectification application should set out the error, the correct position, and the evidence supporting the correction. A rectification order does not retroactively cure the consequences of non-registration; it corrects the record prospectively.
The Reconciliation Discipline
The company secretary should reconcile the register of charges with the ROC’s index of charges, the CHG-2 and CHG-5 certificates, and the financial statements’ borrowings note. A charge that appears in the ROC index but not in the register, or vice versa, is a reconciliation break that should be investigated before an audit or diligence.
Documentation for the Register File
The file should contain: the register of charges; the CHG-1, CHG-2, CHG-4, CHG-5, and CHG-9 filings; the inspection log; the reconciliation working; and the board resolution adopting the reconciliation. The register should be signed by a director and the company secretary where applicable.
Call to Action: For register of charges reconciliation, inspection-readiness review, or Section 87 rectification support, contact office@anujdesaiassociates.com or 9619456656. Website: https://anujdesaiassociates.com. LinkedIn: linkedin.com/in/ca-anuj-desai-122547230.