Short-Comings and Pitfalls of Registering Corporate Guarantee as Charge

The scholars have argued that the basic purpose of registration of a charge created on assets of the company is to serve as a public notice and any person who deals with a company may verify the charges registered with ROC and take an informed commercial decision whether to deal with the said company or not. Scholars have opined that both existing and contingent, should be known to the general public and a 360 degree panoramic view of the credit history including guarantees executed by a company has to be in the public domain. Therefore, according to them, it is also necessary to register charges in respect of Corporate Guarantees executed by a company. This paper has tried to mention some shortcomings and pitfalls of this approach such as inability to raise low capital and thus less money flow in the economy. The paper tries to roughly suggest some balanced approach and how we need to look this through the political lens.