On 6 April 2013 the Companies Act 2006 (Amendment of Part 25) Regulations 2013 (“the Regulations”) came into force which changed the regime for the registration of company charges. The Regulations provide a single scheme applying to all UK companies and aim to clarify previous uncertainty as to which charges should be registered.
What charges need to be registered?
In brief terms, all charges created on or after 6 April 2013 will need to be registered at Companies House, unless they fall within certain excluded categories. Those exclusions include rent deposit deeds (which will assist landlords who no longer need to go through the registration process), charges created by a member of Lloyd’s, and charges excluded from registration requirements by other legislation.
Time period for registration?
Ostensibly the time periods under the previous system remains the same – the charge must be delivered to Companies House within a period of 21 days from the date it was created (unless a court order allowing an extended period is made). This replaces the former 21 day period for registration of the charge.
Consequences for failing to register?
A failure to register will mean the charge is void as against a liquidator, administrator or creditor of the company. Accordingly, it is important to ensure that all registrable charges created on or after 6 April 2013 are delivered to Companies House within the requisite period.
The criminal sanction for failure to register a charge has been removed.
Who should register?
A company who created the charge may register it but given the severe consequences of non-registration, it is likely that chargeholders will make the appropriate notification.
How is the charge registered?
New prescribed forms are available from Companies House which can be completed and filed in paper form or registration can be effected through a new electronic system, together with payment of the appropriate fee. A certified copy of the charge document will also need to be filed, which will be placed on the public register. Commercially sensitive information may be redacted before the document is submitted for registration.
Does a company need to keep a register of charges?
As part of the new system, companies will not be required to maintain their own register of charges, but they are required to keep copies of all charging documentation available for inspection by any creditor or member of the company (without a charge) and by any other person on payment of a fee as may be prescribed.
An almost identical system will apply to Limited Liability Partnerships under separate regulations – The Limited Liability Partnerships (Application of Companies Act 2006) (Amendment) Regulations 2013.