New Regime For Registering Charges At Companies House

As of last Saturday (6 April 2013), the new Companies House charge registration regime came into effect. Here we list the key changes that the new regime brings about.

1. Charges to be registered - With limited exceptions, all charges created by a company or LLP now require registration.

2. New forms - Form MG01 has been replaced by Form MR01, which dispenses with the need to provide details of the 'amount secured' and 'short particulars of the property charged'. The new form does, however, require a short description of any land, ship, aircraft or intellectual property that is (or is required to be) registered in the UK which is subject to a fixed charge. The new form also includes a number of new tick-boxes to indicate whether the charge contains (1) a fixed charge over any property not described in the aforementioned short description; (2) a floating charge, and if so, whether it covers all the company/LLP's property and undertaking; and (3) a negative pledge against the creation of other security ranking equally with or ahead of the charge. There is also a box to tick if the company/LLP is acting as trustee of the property or undertaking which is the subject of the charge.

3. Electronic registration - Alongside the paper-based registration, it is now also possible to register charges electronically at a reduced price of £10. However, there has been some scepticism over the effectiveness/user-friendliness of the electronic system.

4. No criminal offence - Under the new regime, registration of charges is not compulsory and a company does not commit a criminal offence if it fails to register a charge. However, in practice, this means very little; it remains the case that a charge is void against a liquidator, administrator or another creditor of the company or LLP unless it is registered within 21 days of its creation.

5. Documents available for inspection - Companies were previously required to keep a register of charges and a copy of any registrable charge created and to make these available for inspection. This is no longer a requirement, but instead a company must keep a copy of any charge capable of registration, and of any instrument varying or amending it, available for inspection. If details of the prescribed particulars (as described in section 859D) are not contained in the charge but in another document which is referred to or otherwise incorporated in the charge, then that document must be kept by the company and made available for...