The rules for registering security created by UK companies and limited liability partnerships have been dramatically revised by the Department for Business, Innovation and Skills and are due to come into force on 6 April 2013.
The changes aim to simplify and modernise a system which was established over one hundred years ago and include for the first time an electronic filing system for the registration of security.
The key changes introduced by the new regulations are:
- Provision of a single scheme for registering security created by companies and limited liability partnerships which have their place of registration located within the UK.
- Introduction of an electronic filing system. Parties will be able to file charges electronically using either Companies House’s online WebFiling service or its software-based filing platform. A company will be able to file the charge it created using its own authentication code. Other presenters will need to make a one-off application to Companies House for a lender authentication code. Legal advisers have the option to apply for such a code in order to register charge documents on behalf of their clients.
- New requirement to deliver a certified copy of the security instrument which, once the charge is registered, will be placed on the register at Companies House and made available for public download. Although some limited information will be capable of redaction (such as personal information concerning an individual), parties will be well advised to ensure that the instrument does not contain any commercially sensitive information which they do not wish to be made public.
- Original instruments no longer to be delivered to Companies House. Please see above with regard to certified copies.
- Removal of the criminal offence for failing to register a registrable security in time. However, a charge will continue to be void against the liquidator, administrator or any creditor of the company, and the amount secured by the charge will become immediately due and payable if that charge is not registered within 21 days of the date of its creation.
- Abolition of the requirement for companies and limited liability partnerships to keep an internal register of security. However, they will still be required to keep copies of the security instrument, as well as other documentation containing required particulars, available for inspection.
For further information about the new registration regime or registering security generally, please contact a member of the McGuireWoods London debt finance team.