Corporate finance Government publishes latest proposals for revising the registration of charges regime

Corporate finance Government publishes latest proposals for revising the registration of charges regime

The Government has published its latest proposals to revise the current regime for the registration of company charges under the Companies Act 2006. The materials published include a mock up of the relevant sections of the Companies Act, showing how they would be amended. Views on the proposed changes are sought by 30 September 2011.

The main intention of the changes is to create a single scheme that applies to charges created by UK companies and LLPs regardless of either the location of the charged assets or the law used to create the charge.

Key elements of the revised scheme include the following:

  •     charges will be able to be filed electronically;
  •     in a change to the current regime, all charges will be registrable (subject to only a few limited exceptions, which will include rent deposit deeds);
  •     existing criminal sanctions for the failure to register a charge will be abolished (although, as is the case now, failure to register will render the charge invalid as against a liquidator, administrator or creditor);
  •     the particulars of the charge required to be notified will be briefer than under the current regime, and only a certified copy, rather than the original, of the charge instrument will need to be submitted;
  •     a certified copy of the charge instrument will be placed on public record (although the redaction of certain sensitive information will be permitted);
  •     the 21 day filing period will remain, although it will be clarified that this period will start to run the day after the date of creation of the charge;
  •     the current provision allowing extra time for filing charges created outside of the United Kingdom will be repealed;
  •     safeguards to prevent fraudulent filing of the release of a charge will be introduced.


The Government’s intention is to publish draft regulations in early 2012 with the changes coming into force on 1 October 2012.

For further information and a copy of these proposals, click here: http://www.bis.gov.uk/Consultations/registration-of-charges?cat=closedwithresponse
 

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