What is Mortgage Backed Security (MBS)?
A mortgage-backed security (MBS) is a bond type security in which the collateral is provided by a pool of mortgages. For example, A borrows money from Bank ‘B’ mortgaging his house to Bank ‘B’. The Bank ‘B’ sells the mortgage to a company ‘C’ (which may be a government agency or investment bank or private…
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Key Sections, Definitions & Provisions under the Negotiable instrument Act 1881
The Negotiable Instruments Act, 1881 provides a robust legal framework that safeguards both banks and customers during transactions involving cheques, bills of exchange, and promissory notes. Its provisions ensure trust, reliability, and legal recourse in case of disputes, making it a cornerstone of the Indian banking system. Purpose of the Act The primary intent of…
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How to get Satisfaction of Charge certificate from Registrar of companies?
A company upon payment or satisfaction in full of any charge registered under Chapter VI of the Companies Act 2013 shall give intimation of satisfaction to the Registrar of Companies. The procedure for applying for the certificate of satisfaction of charges registered under the companies act is as under. Mandatory Attachment: Letter of the charge…
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What is the meaning of material alteration in a cheque?
Any alteration in the original state of a cheque such as date, amount, payee’s name, changing the word ‘order’ to bearer appearing after payee’s name or in endorsement is called material alteration. All material alteration must have drawer’s approval with his full signature (not initials) where the alterations are made. One of the mandatory features of…
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Is it mandatory to register Negative Lien for creation of Charge?
What is a negative lien? Let us first understand what is a negative lien. Actually, there is no legal definition of the term ‘negative lien’ in any of the Indian legislative enactments. However, as it is understood in the normal course of business, it is merely a negative covenant which restricts a person from creating…
Effects of charge registration under companies act
The Section 2(16) of the Companies Act 2013 defines ‘Charge’ as “an interest or lien created on the property or assets of a company or any of its undertaking or both as security and includes mortgage”. Thus, ‘charge’ can be described as lender’s right to recover his dues by disposing-off the specified assets of the…
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