The office of Registrar of Companies (ROC) is located in the Ministry of Corporate Affairs (MCA), which runs limited liability partnerships (LLPs) and companies in India. Every major state and territory currently have a Registrar of Companies (ROC) at work. As per Section 609 of the Companies Act of the year 1956, the principal duty of the ROCs is to register limited liability partnerships (LLPs) and businesses in every state and union territory. The ROCs are now having the same authority granted to the authorities as per Section 609. Mostly, after the emergence of the new Companies Act in the year 2013, it was granted the sole authority as per Section 396 of the Companies Act of 2013. In this blog we described about ROC Creation Process Under Companies Act 2013

Major Functions of the Registrar of Companies

• The company registration which is also known to be the incorporation of the company, is mostly handled and regulated by the ROC inside the nation.
• As part of its functions, it plays the role of administrator in reporting issues on a number of topics, including the seasonal filing of various documents, it also fulfils the obligations of regulating and reporting businesses, and providing regulation and reporting for their directors and shareholders.  
• The Registrar of Companies has a major role in promoting and enabling business culture.
• The ROC must approve the establishment of a corporation in order for it to get started. There is no doubt that the incorporation certificate that the ROC provides is evidence of the existence of the company. The dissolution of an incorporated business cannot be implemented without removal of the name from the Companies Registry. 
• It should be noted that the Registrar of Corporations has the ability to ask for other information for any company. With the court’s prior approval, it might take a look into its property and check the books of accounts.
• Most notably, a petition for the winding up of a corporation may also be filed by the Registrar of Companies.

ROC Creation Process: Companies Act 2013

In the event that a business has approved a special resolution allowing its board of directors to borrow money to meet the needs of the business and, consequently, to place a charge on the business’s assets and properties in the name of the lending bank or other financial institutions, the following ROC Creation process should be followed:

• Call a board meeting and pass a resolution to use the facility for security of charges. Giving permission to execute the relevant paperwork is also necessary in order to use this facility.
• Within 30 days of the resolution being passed, file extracts of the resolution approved with the ROC in form MGT 14.
• Execution of the paperwork required to use the facility, including providing security.
• As soon as the creation, modification, or satisfaction occurs, record the charges in the register kept on form CHG-7 and have the company’s director, secretary, or other designated representative authenticate it.
• It is necessary to file Form CHG-1 and the prerequisite costs within 30 days of the date of formation or date of modification.

With the e-form, attach the following ROC Creation documents:

• A confirmed, genuine copy of every document stating the creation or modification of the charge.
• Details about other charge holders in the event of a consortium finance or joint charge.
• When property is acquired that is already charged, the evidence documenting the formation or modification of the charge, as well as the document documenting the acquisitions themselves.
• After carefully reviewing each of the filed documents, ROC will issue a certificate of registration in form CHG-2.
• If the CHG-1 is not filed within 30 days but is filed within 300 days, an application for a pardon in form CHG-10 must be submitted. This application must be accompanied by a statement from the company’s director or CS stating that the delay would not impact the rights of creditors. After correct compliance, the ROC will provide a certificate of registration in form CHG-2.
• Form CHG-3 and the necessary charge modification details are filed with the Registrar in cases where a charge that has been registered with the ROC needs to be adjusted.
• If CHG-1 is filed 300 days after the original filing date, the Regional Director of the territory in which the company’s registered office is located must receive an application for a pardon of the delay in form CHG-8.
• Pay the fine amount that the regional director has issued. Generally, the penalty has to be paid within 15 days.
• The Challans must be sent to RD for the covering letter holding the order for the delay to be excused after the necessary fine amount has been paid.
• Within the allotted period, submit the RD’s order in Form INC 28 to the Registrar of Companies.
• Receive approval for Form CHG-1 after Form INC 28 has been approved. A CHG-2 certificate of registration will be issued by the Registrar.

Non-registration of Charge with ROC: Effects

• The liquidator and/or any other Creditor shall not consider a charge that is not registered with ROC.
• This is only applicable, though, if the business decides to wind up. If not, there is still a financial obligation to repay the money even though the charge was not registered.

Non-registration of Charge with ROC: What is the Penalty?

• In the event that any Act provisions are violated, the company faces a fine that cannot be lowered below 1 lakh rupees and may go up to 10 lakh rupees. 
• Each officer found to be in default faces a fine that cannot be lowered below 25000 rupees and may go up to 1 lakh rupees, as well as a term of imprisonment that can last up to six months, or both.

Conclusion

A vital aspect of corporate governance is the filing of charges with the ROC per the Companies Act, 2013, with the objective of ensuring that all financial interest and burdens placed on company assets appear on public record and are available for proper scrutiny. In order to preserve the legal status of the business’s financial dealings, it is imperative to adhere to the prescribed forms, timelines, and non-compliance ramifications. Therefore, in order to maintain accountability and openness in their operations, businesses need to carefully and accurately manage these regulations.

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