Section 82 of the Companies Act provides Satisfaction of charges
Satisfaction of Charge means that a company has fully paid off or settled a secured loan or debt for which it had previously pledged its assets as collateral.
When a company borrows money from a bank or financial institution, it creates a "charge" (security interest) on its properties. Once that loan is completely cleared, the company must officially report this to the Registrar of Companies (ROC) to show that the asset is now free from encumbrance.
Time line within 30 days to complete satisfaction of charges
In case company fails to file satisfaction of charges within 30 days, the ROC may allow the filing to be made within 300 days of the satisfaction, subject to the payment of additional or condonation fees.
Form CHG 4
Steps for filing CHG 4
To obtain No dues certificate from the Bank or Financial institution that the debt has been fully satisfied
The company files e-Form CHG-4 on the Ministry of Corporate Affairs (MCA) portal. This form must be digitally signed by a director/secretary of the company and by the authorized representative of the bank/lender.
If the form is not signed by the lender, the ROC will send a notice to the lender asking them to show cause within 14 days why the satisfaction shouldn't be recorded. If no objection is received, the ROC proceeds.
The ROC enters a memorandum of satisfaction in the Register of Charges and issues a formal Certificate of Satisfaction of Charge (Form CHG-5)
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