Question

Which of the following statements are correct?
(i) Every company shall keep at its registered office a register of charges.
(ii) The register of charges shall be open for inspection during business hours.
(iii) Any member may inspect the register of charges without any payment of fees.
(iv) Any creditor may inspect the register of charges only on payment of the prescribed fees.

• A. Only (i), (ii), and (iii)
• B. Only (i), (ii), and (iv)
• C. Only (i), (iii), and (iv)
• D. Only (ii), (iii), and (iv)

Hint:

Under Section 85 of the Companies Act, 2013, both members and creditors enjoy the statutory right to inspect the register of charges absolutely free of cost.
This facilitates credit transparency and protects lender interests.

Answer 1

The Correct Option is A

Step 1: Understanding the Question:
The question asks us to identify the correct statements regarding the maintenance and inspection of the register of charges by a company under the provisions of the Companies Act, 2013.

Step 2: Key Principles and Statutory Provisions:
The relevant statutory provision is Section 85 of the Companies Act, 2013, read with the Companies (Registration of Charges) Rules, 2014.
This section mandates the compulsory keeping of a register of charges and outlines the rules for public inspection.

Step 3: Detailed Explanation and Analysis:

• Under Section 85(1) of the Act, every company is required to keep at its registered office a register of charges in the prescribed format.
The register must contain details of all charges registered with the Registrar of Companies (RoC) as well as any floating charges.
Therefore, statement (i) is correct.

• Under Section 85(2), the register of charges and the instrument of charges kept by the company must be open for inspection during business hours.
This is subject to reasonable restrictions that the company may impose through its Articles of Association.
Therefore, statement (ii) is correct.

• Section 85(2) further clarifies the fee structure for such inspections.
It explicitly states that any member or creditor of the company can inspect the register of charges without the payment of any fee.
Therefore, statement (iii) is correct, as members are exempted from payment.

• Since creditors are also legally exempted from paying fees for inspection, statement (iv), which states they can inspect "only on payment of the prescribed fees", is incorrect.
Only individuals other than members and creditors are required to pay a prescribed fee for such inspections.

Step 4: Final Answer:
Since statements (i), (ii), and (iii) are correct, and statement (iv) is incorrect, the correct option is (A).