Extension of time to register a charge and effect of not registering a charge
If a charge is not registered within the stipulated time, the company must provide a good reason to ask for an extension of time.
Section 114 of the Act provides that there must be good reason provided for the Court to grant an extension. It is up to the Court to decide.
If a charge is not registered, the creditor or lender will not be able to make a claim or recover his loan if a company winds up.
Where a charge which requires registration is not lodged with the Registrar for registration within the prescribed time, the following will be the consequences:
1. The charge shall so far as any security on the company’s property or undertaking is thereby conferred to be void against the liquidator and any creditor of the company.
2. The company and every officer of the company who is in default shall be guilty of an offence against the Act.
Section 108(1) states that “if a charge is not registered or if this section is not complied with in relation to the charge, the charge shall, so far as any security on the company’s property or undertaking is conferred, be void against the liquidator and any creditor of the company”.