Section 85 of CA 2013 : Section 85: Company?S Register Of Charges

Explanation using Example

Imagine a company, XYZ Private Limited, has taken a loan from a bank and has secured the loan by creating a charge over its factory land. As per Section 85 of the Companies Act, 2013, XYZ Private Limited is required to maintain a register of charges at its registered office. This register would detail the charge over the factory land among any other charges the company may have.

Further, if a shareholder of XYZ Private Limited, let's call him Mr. A, wants to inspect this register, he can do so without having to pay any fees during business hours. Similarly, if a creditor, like the supplier of raw materials to XYZ Private Limited, wishes to inspect the register, she can do so free of charge to ensure the company's assets are not overly encumbered.

In another scenario, a potential investor, Ms. B, is interested in investing in XYZ Private Limited. She is not a member or creditor of the company, so under Section 85, Ms. B can inspect the register of charges, but she might have to pay a prescribed fee and adhere to reasonable restrictions set by the company's articles of association.