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New Clause 27

Additional information to be registered

. The following sections are inserted in Part XII of the Companies Act 1985 --

"Additional information to be registered Particulars of taking up of issue of debentures 408.--(1) Where particulars of a charge for securing an issue of debentures have been delivered for registration, it is the duty of the company--


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(a) to deliver to the registrar for registration particulars in the prescribed form of the date on which any debentures of the issue are taken up, and of the amount taken up, and

(b) to do so before the end of the period of 21 days after the date on which they are taken up.

(2) Where particulars in the prescribed form are delivered to the registrar for registration under this section, he shall file them in the register.

(3) If a company fails to comply with subsection (1), the company and every officer of it who is in default is liable to a fine. Notice of appointment of receiver or manager, &c. 409.--(1) If a person obtains an order for the appointment of a receiver or manager of a company's property, or appoints such a receiver or manager under powers contained in an instrument, he shall within seven days of the order or of the appointment under those powers, give notice of that fact in the prescribed form to the registrar for registration. (2) Where a person appointed receiver or manager of a company's property under powers contained in an instrument ceases to act as such receiver or manager, he shall, on so ceasing, give notice of that fact in the prescribed form to the registrar for registration. (3) Where a notice under this section in the prescribed form is delivered to the registrar for registration, he shall file it in the register.

(4) If a person makes default in complying with the requirements of subsection (1) or (2), he is liable to a fine.

(5) This section does not apply in relation to companies registered in Scotland (for which corresponding provision is made by sections 53, 54 and 62 of the Insolvency Act 1986).

Notice of crystallisation of floating charge, &c. 410.--(1) The Secretary of State may by regulations require notice in the prescribed form to be given to the registrar of--

(a) the occurrence of such events as may be prescribed affecting the nature of the security under a floating charge of which particulars have been delivered for registration, and

(b) the taking of such action in exercise of powers conferred by a fixed or floating charge of which particulars have been delivered for registration, or conferred in relation to such a charge by an order of the court, as may be prescribed.

(2) The regulations may make provision as to--

(a) the persons by whom notice is required to be, or may be, given, and the period within which notice is required to be given ; (

(b) the filing in the register of the particulars contained in the notice and the noting of the date on which the notice was given ; and

(c) the consequences of failure to give notice.

(3) As regards the consequences of failure to give notice of an event causing a floating charge to crystallise, the regulations may include provision to the effect that the crystallisation-- (

(a) shall be treated as ineffective until the prescribed particulars are delivered, and

(b) if the prescribed particulars are delivered after the expiry of the prescribed period, shall continue to be ineffective against such persons as may be prescribed,

subject to the exercise of such powers as may be conferred by the regulations on the court.

(4) The regulations may provide that if there is a failure to comply with such of the requirements of the regulations as may be prescribed, such persons as may be prescribed are liable to a fine. (5) Regulations under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(6) Regulations under this section shall not apply in relation to a floating charge created under the law of Scotland by a company registered in Scotland.".'.-- [Mr. Forth.]

Brought up, and read the First time.

Mr. Forth : I beg to move, That the clause be read a Second time.


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This new clause would replace clause 95 of the Bill. It contains amendments to the new sections that require additional particulars to be delivered to the registrar. The amendments make changes to the additional particulars to be delivered in respect of debentures, the duties of the registrar to file notices relating to receivers and managers, and the application of new section 410 in the new clause under Scots law.

Mr. Cousins : When we talked earlier in another context about the costs of compliance of regulatory bodies, the Minister was keen that such bodies should take the cost of compliance into account. I was a little disturbed by what the Minister said in speaking to this new clause. I do not think that he took the legal sanctions in matters of this kind as seriously as they deserve to be taken. The new clause creates a new offence for which a fine may be imposed. Will the Minister outline what the size of that fine might be? This is referred to in section 408.

Mr. Forth : I cannot tell the hon. Member at this stage what the size of the fine will be.

Mr. Cousins : That is disgraceful.

Mr. Forth : In the nature of this sort of provision, it is unusual to specify the exact level of the fine. I should have thought that the hon. Gentleman would know that by now. I am surprised that, having sat through the Committee stage, he even has to ask the question. Throughout these important provisions, and I am glad that the hon. Gentleman has been following them, we have tried to strike a balance between endeavouring--

It being ten minutes to Ten o'clock, Mr. Deputy Speaker-- proceeded, pursuant to the order this day, to put forthwith the Question already proposed from the Chair .

Question agreed to .

Clause read a Second time, and added to the Bill .

Mr. Deputy Speaker-- then proceeded to put forthwith the Question on new clauses and new schedules, moved by a member of the Government, of which notice had been given, to that part of the Bill to be concluded at ten minutes to Ten o'clock .

New Clause 28

Copies of instruments and register to be kept by the company

.The following sections are inserted in Part XII of the Companies Act 1985--

Copies of instruments and registerto be kept by company-- . The following sections are inserted in Part XII of the Companies Act 1985--

" Copies of instruments and register to be kept by company Duty to keep copies of instruments and register

411.--(1) Every company shall keep at its registered office a copy of every instrument creating or evidencing a charge over the company's property.

In the case of a series of uniform debentures, a copy of one debenture of the series is sufficient.

(2) Every company shall also keep at its registered office a register of all such charges, containing entries for each charge giving a short description of the property charged, the amount of the charge and (except in the case of securities to bearer) the names of the persons entitled to it.

(3) This section applies to any charge, whether or not particulars are required to be delivered to the registrar for registration.


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(4) If a company fails to comply with any requirement of this section, the company and every officer of it who is in default is liable to a fine.

Inspection of copies and register

412.--(1) The copies and the register referred to in section 411 shall be open to the inspection of any creditor or member of the company without fee ; and to the inspection of any other person on payment of such fee as may be prescribed.

(2) Any person may request the company to provide him with a copy of--

(a) any instrument creating or evidencing a charge over the company's property, or

(b) any entry in the register of charges kept by the company, on payment of such fee as may be prescribed.

This subsection applies to any charge, whether or not particulars are required to be delivered to the registrar for registration. (3) The company shall send the copy to him not later than ten days after the day on which the request is received or, if later, on which payent is received.

(4) If inspection of the copies or register is refused, or a copy requested is not sent within the time specified above--

((a) the company and every officer of it who is in default is liable to a fine, and

(b) the court may by order compel an immediate inspection of the copies or register or, as the case may be, direct that the copy be sent immediately.".'.-- [Mr. Redwood.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 29

Power to make further provision by regulations

. The following section is inserted in Part XII of the Companies Act 1985--

"Supplementary provisions Power to make further provision by regulations. 413.--(1) The Secretary of State may by regulations make further provision as to the application of the provisions of this Part in relation to charges of any description specified in the regulations.

Nothing in the following provisions shall be construed as restricting the generality of that power.

(2) The regulations may require that where the charge is contained in or evidenced or varied by a written instrument there shall be delivered to the registrar for registration, instead of particulars or further particulars of the charge, the instrument itself or a certified copy of it together with such particulars as may be prescribed.

(3) The regulations may provide that a memorandum of a charge ceasing to affect property of the company shall not be accepted by the registrar unless supported by such evidence as may be prescribed, and that a memorandum not so supported shall be treated as not having been delivered.

(4) The regulations may also provide that where the instrument creating the charge is delivered to the registrar in support of such a memorandum, the registrar may mark the instrument as cancelled before returning it and shall send copies of the instrument cancelled to such persons as may be prescribed.

(5) The regulations may exclude or modify, in such circumstances and to such extent as may be prescribed, the operation of the provisions of this Part relating to the voidness of a charge. (6) The regulations may require, in connection with the delivery of particulars, further particulars or a memorandum of the charge's ceasing to affect property of the company, the delivery of such supplementary information as may be prescribed, and may--

(a) apply in relation to such supplementary information any provisions of this Part relating to particulars, further particulars or such a memorandum, and

(b) provide that the particulars, further particulars or memorandum shall be treated as not having been delivered until the required supplementary information is delivered.


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(7) Regulations under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.".'.-- [Mr. Redwood.] Brought up, read the First and Second time, and added to the Bill.

New Clause 30

Other supplementary provisions

. The following sections are inserted in Part XII of the Companies Act 1985 --

"Date of creation of charge 414.--(1) References in this Part to the date of creation of a charge by a company shall be construed as follows.

(2) A charge created under the law of England and Wales shall be taken to be created--

(a) in the case of a charge created by an instrument in writing, when the instrument is executed by the company or, if its execution by the company is conditional, upon the conditions being fulfilled, and

(b) in any other case, when an enforceable agreement is entered into by the company conferring a security interest intended to take effect forthwith or upon the company acquiring an interest in property subject to the charge.

(3) A charge created under the law of Scotland shall be taken to be created --

(a) in the case of a floating charge, when the instrument creating the floating charge is executed by the company, and

(b) in any other case, when the right of the person entitled to the benefit of the charge is constituted as a real right.

(4) Where a charge is created in the United Kingdom but comprises property outside the United Kingdom, any further proceedings necessary to make the charge valid or effectual under the law of the country where the property is situated shall be disregarded in ascertaining the date on which the charge is to be taken to be created.

Prescribed particulars and related expressions 415.--(1) References in this Part to the prescribed particulars of a charge are to such particulars of, or relating to, the charge as may be prescribed.

(2) The prescribed particulars may, without prejudice to the generality of subsection (1), include--

(a) whether the company has undertaken not to create other charges ranking in priority to or pari passu with the charge, and (b) whether the charge is a market charge within the meaning of Part VII of the Companies Act 1989 or a charge to which the provisions of that Part apply as they apply to a market charge. (3) References in this Part to the registered particulars of a charge at any time are to such particulars and further particulars of the charge as have at that time been duly delivered for registration.

(4) References in this Part to the registered particulars of a charge being complete and accurate at any time are to their including all the prescribed particulars which would be required to be delivered if the charge were then newly created.

Notice of matters disclosed on register 416.--(1) A person taking a charge over a company's property shall be taken to have notice of any matter requiring registration and disclosed on the register at the time the charge is created.

(2) Otherwise, a person shall not be taken to have notice of any matter by reason of its being disclosed on the register or by reason of his having failed to search the register in the course of making such inquiries as ought reasonably to be made.

(3) The above provisions have effect subject to any other statutory provisions as to whether a person is to be taken to have notice of any matter disclosed on the register.

Power of court to dispense with signature 417.--(1) Where it is proposed to deliver further particulars of a charge, or to deliver a memorandum of a charge ceasing to affect the company's property, and--


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(a) the chargee refuses to sign or authorise a person to sign on his behalf, or cannot be found, or

(b) the company refuses to authorise a person to sign on its behalf,

the court may on the application of the company or the chargee, or of any other person having a sufficient interest in the matter, authorise the delivery of the particulars or memorandum without that signature.

(2) The order may be made on such terms as appear to the court to be appropriate.

(3) Where particulars or a memorandum are delivered to the registrar for registration in reliance on an order under this section, they must be accompanied by an office copy of the order. In such a case the references in sections 401 and 403 to the particulars or memorandum being duly signed are to their being otherwise duly signed.

(4) The registrar shall file the office copy of the court order along with the particulars or memorandum.".'.-- [Mr. Redwood.] Brought up, read the First and Second time, and added to the Bill.

New Clause 31

Interpretation, &c.

. The following sections are inserted in Part XII of the Companies Act 1985--

"Regulations 418. Regulations under any provision of this Part, or prescribing anything for the purposes of any such provision (

(a) may make different provision for different cases, and (

(b) may contain such supplementary, incidental and transitional provisions as appear to the Secretary of State to be appropriate. Minor definitions 419.--(1) In this Part--

"chargee" means the person for the time being entitled to exercise the security rights conferred by the charge ;

"issue of debentures" means a group of debentures, or an amount of debenture stock, secured by the same charge ; and

"series of debentures" means a group of debentures each containing or giving by reference to another instrument a charge to the benefit of which the holders of debentures of the series are entitled pari passu.

(2) References in this Part to the creation of a charge included the variation of a charge which is not registrable so as to include property by virtue of which it becomes registrable.

The provisions of section 414 (construction of references to date of creation of charge) apply in such a case with any necessary modifications.

(3) References in this Part to the date of acquisition of property by a company are--

(a) in England and Wales, to the date on which the acquisition is completed, and

(b) in Scotland, to the date on which the transaction is settled. (4) In the application of this Part to a floating charge created under the law of Scotland, references to crystallisation shall be construed as references to the attachment of the charge.

(5) References in this Part to the beginning of insolvency proceedings are to--

(a) the presentation of a petition on which an administration order or winding-up order is made, or

(b) the passing of a resolution for voluntary winding up. Index of defined expressions

420. The following Table shows the provisions of this Part defining or otherwise explaining expressions used in this Part (other than expressions used only in the same section)--

charge sections 395(2) and 396(6)

charge requiring registration section 396

chargee section 419(1)


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complete and accurate (in relation to registered particulars) section 415(4)

creation of charge section 419(2)

crystallisation (in relation to Scottish floating charge) section 419(4)

date of acquisition (of property by a company) section 419(3) date of creation of charge section 414

further particulars section 401

insolvency proceedings, beginning of section 419(5)

issue of debentures section 419(1)

memorandum of charge ceasing to affect company's property section 403

prescribed particulars section 415(1) and (2)

property section 395(2)

registered particulars section 415(3)

registrar and registration in relation to a charge section 395(4)

relevant event section 399(2)

series of debentures section 419(1).".'.-- [Mr. Redwood]

Brought up, read the First and Second time, and added to the Bill.


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