Multiple choice

Which of the following charges, in case of a company, does not require to be registered u/s 125 of Companies Act?

  1. A charge on book debts of the company

  2. A floating charge on stocks of the company

  3. A charge on immovable property of the company

  4. A charge relating to contingent liabilities of the firm like letter of credit bank guarantee
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D Correct answer
Explanation

Section 125 of Companies Act applies to the charges like: a charge for the purpose of securing any issue of debentures a charge on uncalled share capital of the company a charge on any book debts of the company a charge, not being a pledge, on any movable property of the company a floating charge on the undertaking or any property of the company including stock-in-trade a charge on calls made but not paid etc. However, a charge relating to contingent liabilities of the firm like letter of credit bank guarantee is not under this section.

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