Sections 85 and 86 of the Companies Act, 2013: Company's Register of Charges and Penalty for Contravention
Sections 85 and 86 form part of Chapter VI of the Companies Act, 2013, which deals with registration of charges. Section 85 requires a company to maintain its own register of charges and related instruments, while Section 86 prescribes monetary penalties for defaults under the Chapter and links wilful false information or knowing suppression of material information required under Section 77 to action under Section 447.
Section 85 - Company's register of charges
Section 85 creates a continuing record-keeping obligation at the company level. It is distinct from the register of charges maintained by the Registrar under Section 81.
Section 85(1): Every company must keep at its registered office a register of charges in the prescribed form and manner. The register must cover charges and floating charges affecting the company's property, assets or undertakings and contain the prescribed particulars. A copy of the instrument creating the charge must also be kept at the registered office with the register.
Section 85(2): The register of charges and the instruments kept with it must be open for inspection during business hours. A member or creditor may inspect them without payment of fee. Any other person may inspect them on payment of the prescribed fee, subject to reasonable restrictions imposed by the company's articles.
Form CHG-7 and the applicable rules
Rule 10 of the Companies (Registration of Charges) Rules, 2014 prescribes the company's register of charges in Form CHG-7. The form records matters such as the charge ID, creation or acquisition date, registration date, description of charged property, amount secured, charge holder details, terms and conditions, modification, satisfaction and related delay particulars.
Practical meaning of Section 85
The provision is intended to keep an accessible company-level record of security interests affecting company assets. Companies should ensure that the register and the underlying charge instruments are maintained at the registered office and updated when a charge is created, modified or satisfied, in accordance with Chapter VI and the applicable rules.
Section 86 - Punishment for contravention
Section 86(1): If a company defaults in complying with any provision of Chapter VI, the company is liable to a penalty of Rs. 5,00,000. Every officer of the company who is in default is liable to a penalty of Rs. 50,000.
Section 86(2): If a person wilfully furnishes false or incorrect information, or knowingly suppresses material information required to be registered under Section 77, that person is liable for action under Section 447.
What Section 77 refers to
Section 77 is the principal provision requiring registration of charges created by a company on its property, assets or undertakings, whether tangible or otherwise, and situated in or outside India, subject to the statutory requirements and prescribed procedure. Section 86(2) specifically addresses dishonest information or suppression in connection with information required to be registered under Section 77.
Amendment position
The present penalty-based text of Section 86(1) was substituted by the Companies (Amendment) Act, 2020 with effect from 21 December 2020. Section 86 was earlier numbered as sub-section (1), and sub-section (2) was inserted by the Companies (Amendment) Act, 2019 with effect from 2 November 2018.
Official legal resources
For the current statutory text and rules, refer to the Companies Act, 2013 on the Ministry of Corporate Affairs website, the Companies (Registration of Charges) Rules, 2014 - Chapter VI, and the Companies Act, 2013 on India Code.
Note: This page is a general legal-information summary. Statutory provisions should be read with applicable rules, notifications, amendments and facts of the particular case. Last reviewed: 17 September 2026.