Gurmail Sidhu
Posted:
28 Jun, 2011

Consequences of failure to register

Under the provisions of the Companies Acts a charge or incumbrance against the assets or a part of the assets of a Company must be registered at Companies House with 21 days of its creation. A fee of is payable with the application. The Companies Act lists the charges that require registration.

If the Charge is not registered within time then the charge is unenforceable, and void against a Liquidator, Administrator and any other creditor of the Company. The Company will remain liable for the repayment of the debt but in effect it is unsecured.

Procedure to apply for an order for registration

If the Charge or Debenture is not registered within the prescribed time limits then an application has to be made to the Companies Court for an order that the Charge may be registered out of time.

The Application is made to the court by the Company or an interested person (which is usually the party having the benefit of the charge) by filing with the court:

1. A claim under CPR Part 8 and should contain details of the circumstances leading to the failure to register on time the charge on time supported by a

2. Evidence by way of a witness statement setting out the circumstances leading to the default .i.e. that it was due to inadvertence, accident or other cause and that it does not prejudice the position of other creditors and the shareholders or circumstances where it is just and equitable to grant the order. A copy of the Charge is produced to the court as part of the evidence.

3. A prescribed court fee is payable at the time of lodging the application.

     It is necessary to serve a copy of the application and supporting evidence on all known parties that are or maybe effected by the application and on the Company. The effected parties will be other creditors who may have a charge or may have applied to have a charge registered against the Company.

The Court requires a statement of solvency to be filed by an officer of the Company prior to the hearing of the application for the order which is not more than 14 days old at the time of the hearing.

The Hearing of the application is usually in the Registrar's Chambers.

NB. This is not meant to be a definitive guide and advice on the subject matter or the procedure and is intended only to be a general guide. Each set of circumstances need separate consideration and you are advised to take specialist advice before acting on any thing mentioned above to ensure that your particular circumstances are considered and catered for.

We would be happy to provide to you all necessary advice and assistance in this respect.