Lenders, corporate borrowers and their lawyers can celebrate a new era where registering a charge becomes quicker, easier and cheaper.
Lenders, corporate borrowers and their lawyers can celebrate a new era where registering a charge becomes quicker, easier and cheaper. With effect from 6 April a new regime is introduced by the Companies Act 2006 (Amendment of Part 25) Regulations 2013 for the registration of company charges. The primary purpose of the Regulations is to streamline and modernise the registration of charges created by companies and LLP’s in the UK. Currently, there is a statutory list of registrable charges but under the new regime all charges will be registrable unless excluded as specified in the Companies Act itself or any other legislation. This will offer clarity in what can currently be a very confusing area. Charges must continue to be registered within the 21 days of being deemed to have been created, failing which they will be void against a liquidator, administrator or creditor. A court application will generally still be necessary to extend this time limit and to correct certain errors in the particulars delivered. The criminal offence for failure to register a charge is, however, removed under the changes. The Regulations create a more modern filing system to allow better identification and tracking of security creation and enforcement. Documents can now be submitted electronically as well as through paper filings. Technical changes such as new forms and Unique Reference Codes for individual charges, should help with the tracking and accessibility of information. It will no longer be necessary to provide an original signed version of the charge document. The quality of information placed on the public record will be improved as well as the accessibility to the instruments creating company charges by making copies of the instrument or document creating each charge available on the Register, (although the parties will be able to redact certain confidential information within the document before submitting it for filing). The changes will hopefully reduce uncertainty, improve the quality of information about security given by companies, streamline procedures and reduce costs. The Department for Business, Innovation and Skills has estimated that these changes could save those responsible for registering charges in aggregate up to £22m a year. For more information, please contact Neil Harpham on 01604 233233 or at firstname.lastname@example.org. This article is intended to provide a general commentary on some of the changes to the regime for filing company charges with effect from 6 April 2013. It is not exhaustive and should not be treated as a substitute for comprehensive legal advice.