Even with the introduction of the Companies Act 2006, there were a number of administrative aspects of the registration of company charges that needed to be updated and brought into the 21st century.
The Department for Business, Innovation and Skills (BIS) therefore published draft Regulations (amending the provisions of Part 25 of the Companies Act 2006) in 2012 addressing this point. These Regulations were then revised and published in their latest reincarnation in January 2013.
The effects of the amended draft Regulations, which are due to come into force on 6th April 2013, are as follows.
1. The Regulations no longer distinguish between companies incorporated in different parts of the UK. It no longer matters whether a company is registered, for example, in England or in Scotland. The Regulations apply to all UK registered companies.
2. The aim of the Regulations is to streamline procedures and reduce costs by enabling electronic filing of charges.
3. Previously, not filing a charge with the Registrar would amount to a criminal offence and result in the charge being invalid. The Regulations still maintain the sanction of invalidity, if a charge is not registered; however, the prospect of a criminal penalty has been removed.
4. The Regulations simplify which charges can be registered. In essence, all charges (save for cash deposits given as a security in connection with the lease of land and charges created by a member of Lloyd’s) can be registered.
5. The charge instrument or document will now be available for viewing in full (save for certain personal information that can be omitted) on the register at Companies House. This means that a certified copy of the charge instrument or document needs to be delivered to Companies House in order for the Registrar to register the charge.
6. The charge instrument or document will have to be accompanied with a ‘section 859D statement of particulars’, which will contain, among other things, the registered name and number of the company, the date of creation of the charge and the date of acquisition of the property/undertaking concerned and the name of each of the persons in whose favour the charge has been created. This will enable more effective searching of the register.
7. Upon registration, each charge will be allocated a unique reference code (URC) that will allow anybody searching the register to track a charge and check whether it has been satisfied, whether it be only in part or in full.
8. Companies will no longer be required to keep a register of charges; however, they will still be required to keep copies of the full charge instrument or document available for inspection. These should be kept with the statutory books should any person wish to inspect the validity and wording of the charges.
The Regulations will apply to all charges created on or after 6th April 2013 and where a company acquires property/undertaking on or after 6th April 2013, which is subject to an existing charge that would require registration under the Regulations. The time limit for registration remains the same, i.e. 21 days beginning with the day after the date of creation of the charge.
It will still be possible to file the charge with Companies House in paper form; however, this will incur a higher fee of £13, compared with the £10 electronic filing fee. No fee will be payable for filing statements of satisfaction or release of charge.
If you would like to discuss any aspects of this or require more information on registering charges, please feel free to contact our Corporate department on 01908 396 230.