Registering Charges at Companies House: Update November 2012

8 November, 2012

On 9 August 2012 the Department for Business, Innovation and Skills published draft regulations which alter the regime for registration at Companies House of security created by companies and limited liability partnerships (LLPs).

The draft regulations are intended to streamline and modernise procedures with a view to both reducing costs for those wanting to put information on public record and increase access to information held on public records.

 

The key changes implemented by the draft regulations are as follows:

1. The creation of one unified UK-wide system of registration
The draft regulations seek to create one system for the registration of charges irrespective of where the company or LLP was incorporated with only limited exceptions.

2. Changes to the type of security which can be registered
All charges created by a company should be registered unless they are expressly excluded by the draft regulations themselves or another piece of legislation. Examples of security which will not need to be registered include rent deposits or liens over property.

3. Introduction to electronic filing
It will be possible to submit documents for registration electronically. It is stipulated that brief particulars of the security, along with certified copies of security instruments, will need to be submitted. It is not yet clear how, in practical terms, electronic filing will work. However, it will still be possible to submit paper filings.

4. Removal of criminal sanctions
Failure to register security will no longer attract a criminal sanction but commercial sanctions will still apply. Unregistered security may be invalid against a liquidator, administrator or creditor of the security provider. Criminal sanctions will continue to apply for failure to notify Companies House of an enforcement action or for failure to keep a copy of any registrable security.

5. The 21 day period
Crucially, the 21 day period in which security must be registered with Companies House remains the same. The draft regulations do, however, clarify with more precision when a security is created and, therefore, from when the 21 day time limit will start to run.

6. Information available on the public register
The full text of the security instrument will be available to view, although the draft regulations state that personal information including names, bank details and signatures, but no other commercially sensitive information, may be redacted from the submitted certified copy of the charge instrument. Each security document will be allocated a unique reference code (URC). This code will allow security to be tracked to enable users to see if it is partially or fully satisfied.

 

The draft regulations were open to a final and limited consultation which closed on 7 September 2012. The definitive regulations are expected to come into force on 6 April 2013.

A copy of the draft regulations is available on the BIS website:

• Draft regulations relating to companies.
• Draft regulations relating to LLPs.
• Explanatory note.

Reviewed in 2015