Registering charges at Companies House – changes ahead
See also November 2012 update here
At the end of last year, the Government published its response to the consultation by the Department for Business Innovation and Skills (BIS) on the regime for the registration of charges created by companies and limited liability partnerships at Companies House.
The Government proposes to change the current registration process in a number of significant ways, including by:
1) Changing which charges are registrable
All mortgages or charges created by a company to which the legislation applies will be registrable unless expressly excluded by other legislation or by the new regulations. However, the requirement to register existing charges on property which is acquired is to be abolished and registration will no longer be required in relation to the crystallisation of a floating charge.
2) Alternating the consequences of registering and not registering a charge
The current sanction of invalidity and the 21 day period for registration will be retained but there are plans to abolish the criminal sanction for failure to register. A buyer of assets subject to an unregistered charge will take them free of the charge while a chargee over assets of a company will be deemed to have notice of an earlier charge which has been registered at Companies House.
3) Removing the requirement for overseas companies to register charges they create
The scheme will apply to all companies incorporated under the Companies Acts as well as to unregistered companies and limited liability partnerships. However, the legislation will not apply to overseas companies, even if they have registered a place of business in the United Kingdom.
4) Altering the process for registering charges
Under the new regulations, charges will be able to be registered electronically but particulars of the charge will still need to be provided. However, the particulars required will be much briefer than at present. Companies House will continue to issue a certificate of registration, but this will only be conclusive as to the identity of the chargor, and the fact that the charge was registered within 21 days and will not be conclusive evidence of the assets charged.
In its response the Government has indicated that it intends to publish draft regulations implementing these changes in early 2011 with any changes intended to come into force in 2012 or 2013.
Reviewed in 2015