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Creation of Charges

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Creation of Charges

A charge is basically a right which is created by a person or company (borrower) on its assets and properties, whether present or future, in favor of a bank or financial institution (lender) which lends financial assistance. where an immovable property of one person is by act of parties or operation of law made security for the payment of money to another and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property, and all the provisions which apply to a simple mortgage shall, so far as may be, apply to such charge. There are two types of charge:
Fixed Charge: Fixed Charge is defined as a lien or mortgage created over specific and identifiable fixed assets .The charge covers all those assets that are not sold by the company normally. It is created to secure the repayment of the debt.
Floating Charge: The lien or mortgage which is not particular to any asset of the company is known as Floating Charge. The charge is dynamic in nature in which the quantity and value of asset changes periodically.
It is mandatory to register the charge on Roc. So, Tax return wala can help you in this regard.