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S.C.D.  Standing Committee Proceedings: 20th July 2006            

528

 

Company Law Reform Bill[ [], continued

 
 

(b)    

on summary conviction, to a fine not exceeding the statutory maximum.’.

 


 

Charge in series of debentures

 

Margaret Hodge

 

Added  nc310

 

To move the following Clause:—

 

‘(1)    

Where a series of debentures containing, or giving by reference to another

 

instrument, any charge to the benefit of which debenture holders of that series are

 

entitled pari passu is created by a company, it is for the purposes of section

 

(Charges created by a company)(1) sufficient if the required particulars, together

 

with the deed containing the charge (or, if there is no such deed, one of the

 

debentures of the series), are delivered to the registrar before the end of the period

 

allowed for registration.

 

(2)    

The following are the required particulars—

 

(a)    

the total amount secured by the whole series, and

 

(b)    

the dates of the resolutions authorising the issue of the series and the date

 

of the covering deed (if any) by which the series is created or defined, and

 

(c)    

a general description of the property charged, and

 

(d)    

the names of the trustees (if any) for the debenture holders.

 

(3)    

Particulars of the date and amount of each issue of debentures of a series of the

 

kind mentioned in subsection (1) must be sent to the registrar for entry in the

 

register of charges.

 

(4)    

Failure to comply with subsection (3) does not affect the validity of the

 

debentures issued.

 

(5)    

Subsections (2) to (6) of section (Charges created by a company) apply for the

 

purposes of this section as they apply for the purposes of that section, but as if

 

references to the registration of the charge were a reference to the registration of

 

the series of debentures.’.

 


 

Additional registration requirement for commission etc. in relation to debentures

 

Margaret Hodge

 

Added  nc311

 

To move the following Clause:—

 

‘(1)    

Where any commission, allowance or discount has been paid or made either

 

directly or indirectly by a company to a person in consideration of his—

 

(a)    

subscribing or agreeing to subscribe, whether absolutely or conditionally,

 

for debentures in a company, or

 

(b)    

procuring or agreeing to procure subscriptions, whether absolute or

 

conditional, for such debentures,

 

    

the particulars required to be sent for registration under section (Charges created

 

by a company) shall include particulars as to the amount or rate per cent. of the

 

commission, discount or allowance so paid or made.


 
 

S.C.D.  Standing Committee Proceedings: 20th July 2006            

529

 

Company Law Reform Bill[ [], continued

 
 

(2)    

The deposit of debentures as security for a debt of the company is not, for the

 

purposes of this section, treated as the issue of debentures at a discount.

 

(3)    

Failure to comply with this section does not affect the validity of the debentures

 

issued.’.

 


 

Endorsement of certificate on debentures

 

Margaret Hodge

 

Added  nc312

 

To move the following Clause:—

 

‘(1)    

The company shall cause a copy of every certificate of registration given under

 

section (Register of charges to be kept by registrar) to be endorsed on every

 

debenture or certificate of debenture stock which is issued by the company, and

 

the payment of which is secured by the charge so registered.

 

(2)    

But this does not require a company to cause a certificate of registration of any

 

charge so given to be endorsed on any debenture or certificate of debenture stock

 

issued by the company before the charge was created.

 

(3)    

If a person knowingly and wilfully authorises or permits the delivery of a

 

debenture or certificate of debenture stock which under this section is required to

 

have endorsed on it a copy of a certificate of registration, without the copy being

 

so endorsed upon it, he commits an offence.

 

(4)    

A person guilty of an offence under this section is liable on summary conviction

 

to a fine not exceeding level 3 on the standard scale.’.

 


 

Charges created in, or over property in, jurisdictions outside the United Kingdom

 

Margaret Hodge

 

Added  nc313

 

To move the following Clause:—

 

‘(1)    

Where a charge is created outside the United Kingdom comprising property

 

situated outside the United Kingdom, the delivery to the registrar of a verified

 

copy of the instrument by which the charge is created or evidenced has the same

 

effect for the purposes of this Chapter as the delivery of the instrument itself.

 

(2)    

Where a charge is created in the United Kingdom but comprises property outside

 

the United Kingdom, the instrument creating or purporting to create the charge

 

may be sent for registration under section (Charges created by a company) even

 

if further proceedings may be necessary to make the charge valid or effectual

 

according to the law of the country in which the property is situated.’.

 



 
 

S.C.D.  Standing Committee Proceedings: 20th July 2006            

530

 

Company Law Reform Bill[ [], continued

 
 

Charges over property in another United Kingdom jurisdiction

 

Margaret Hodge

 

Added  nc314

 

To move the following Clause:—

 

‘(1)    

Subsection (2) applies where—

 

(a)    

a charge comprises property situated in a part of the United Kingdom

 

other than the part in which the company is registered, and

 

(b)    

registration in that other part is necessary to make the charge valid or

 

effectual under the law of that part of the United Kingdom.

 

(2)    

The delivery to the registrar of a verified copy of the instrument by which the

 

charge is created or evidenced, together with a certificate stating that the charge

 

was presented for registration in that other part of the United Kingdom on the date

 

on which it was so presented has, for the purposes of this Chapter, the same effect

 

as the delivery of the instrument itself.’.

 


 

Northern Ireland: registration of certain charges etc., affecting land

 

Margaret Hodge

 

Added  nc315

 

To move the following Clause:—

 

‘(1)    

Where a charge imposed by an order under Article 46 of the 1981 Order or notice

 

of such a charge is registered in the Land Registry against registered land or any

 

estate in registered land of a company, the Registrar of Titles shall as soon as may

 

be cause 2 copies of the order made under Article 46 of that Order or of any notice

 

under Article 48 of that Order to be delivered to the registrar.

 

(2)    

Where a charge imposed by an order under Article 46 of the 1981 Order is

 

registered in the Registry of Deeds against any unregistered land or estate in land

 

of a company, the Registrar of Deeds shall as soon as may be cause 2 copies of

 

the order to be delivered to the registrar.

 

(3)    

On delivery of copies under this section, the registrar shall—

 

(a)    

register one of them in accordance with section (Register of charges to be

 

kept by registrar), and

 

(b)    

not later than 7 days from that date of delivery, cause the other copy

 

together with a certificate of registration under section (Register of

 

charges to be kept by registrar)(5) to be sent to the company against

 

which judgment was given.

 

(4)    

Where a charge to which subsection (1) or (2) applies is vacated, the Registrar of

 

Titles or, as the case may be, the Registrar of Deeds shall cause a certified copy

 

of the certificate of satisfaction lodged under Article 132(1) of the 1981 Order to

 

be delivered to the registrar for entry of a memorandum of satisfaction in

 

accordance with section (Entries of release and satisfaction).

 

(5)    

In this section—

 

“the 1981 Order” means the Judgments Enforcement (Northern Ireland)

 

Order 1981;

 

“the Registrar of Deeds” means the registrar appointed under the

 

Registration of Deeds Act (Northern Ireland) 1970,


 
 

S.C.D.  Standing Committee Proceedings: 20th July 2006            

531

 

Company Law Reform Bill[ [], continued

 
 

“Registry of Deeds” has the same meaning as in the Registration of Deeds

 

Acts,

 

“Registration of Deeds Acts” means the Registration of Deeds (Northern

 

Ireland) 1970 (c. 25) and every statutory provision for the time being in

 

force amending that Act or otherwise relating to the registry of deeds, or

 

the registration of deeds, orders or other instruments or documents in

 

such registry,

 

“the Land Registry” and “the Registrar of Titles” are to be construed in

 

accordance with section 1 of the Land Registration Act (Northern

 

Ireland) 1970 (c. 18),

 

“registered land” and “unregistered land” have the same meaning as in Part

 

3 of the Land Registration Act (Northern Ireland) 1970.’.

 


 

Register of charges to be kept by registrar

 

Margaret Hodge

 

Added  nc316

 

To move the following Clause:—

 

‘(1)    

The registrar shall keep, with respect to each company, a register of all the

 

charges requiring registration under this Chapter.

 

(2)    

In the case of a charge to the benefit of which holders of a series of debentures are

 

entitled, the registrar shall enter in the register the required particulars specified

 

in section (Charge in series of debentures)(2).

 

(3)    

In the case of a charge imposed by the Enforcement of Judgments Office under

 

Article 46 of the Judgments Enforcement (Northern Ireland) 1981, the registrar

 

shall enter in the register the date on which the charge became effective.

 

(4)    

In the case of any other charge, the registrar shall enter in the register the

 

following particulars—

 

(a)    

if it is a charge created by a company, the date of its creation and, if it is

 

a charge which was existing on property acquired by the company, the

 

date of the acquisition,

 

(b)    

the amount secured by the charge,

 

(c)    

short particulars of the property charged, and

 

(d)    

the persons entitled to the charge.

 

(5)    

The registrar shall give a certificate of the registration of any charge registered in

 

pursuance of this Chapter, stating the amount secured by the charge.

 

(6)    

The certificate—

 

(a)    

shall be signed by the registrar or authenticated by the registrar’s official

 

seal, and

 

(b)    

is conclusive evidence that the requirements of this Chapter as to

 

registration have been satisfied.

 

(7)    

The register kept in pursuance of this section shall be open to inspection by any

 

person.’.

 



 
 

S.C.D.  Standing Committee Proceedings: 20th July 2006            

532

 

Company Law Reform Bill[ [], continued

 
 

The period allowed for registration

 

Margaret Hodge

 

Added  nc317

 

To move the following Clause:—

 

‘(1)    

The period allowed for registration of a charge created by a company is—

 

(a)    

21 days beginning with the day after the day on which the charge is

 

created, or

 

(b)    

if the charge is created outside the United Kingdom, 21 days beginning

 

with the day after the day on which the instrument by which the charge

 

is created or evidenced (or a copy of it) could, in due course of post (and

 

if despatched with due diligence) have been received in the United

 

Kingdom.

 

(2)    

The period allowed for registration of a charge to which property acquired by a

 

company is subject is—

 

(a)    

21 days beginning with the day after the day on which the acquisition is

 

completed, or

 

(b)    

if the property is situated and the charge was created outside the United

 

Kingdom, 21 days beginning with the day after the day on which the

 

instrument by which the charge is created or evidenced (or a copy of it)

 

could, in due course of post (and if despatched with due diligence) have

 

been received in the United Kingdom.

 

(3)    

The period allowed for registration of particulars of a series of debentures as a

 

result of section (Charge in series of debentures) is—

 

(a)    

if there is a deed containing the charge mentioned in section (Charge in

 

series of debentures)(1), 21 days beginning with the day after the day on

 

which that deed is executed, or

 

(b)    

if there is no such deed, 21 days beginning with the day after the day on

 

which the first debenture of the series is executed.’.

 


 

Registration of enforcement of security

 

Margaret Hodge

 

Added  nc318

 

To move the following Clause:—

 

‘(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 7 days of the order or of the

 

appointment under those powers, give notice of the fact to the registrar.

 

(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 the registrar notice to that effect.

 

(3)    

The registrar must enter a fact of which he is given notice under this section in the

 

register of charges.

 

(4)    

A person who makes default in complying with the requirements of this section

 

commits an offence.

 

(5)    

A person guilty of an offence under this section is liable on summary conviction

 

to a fine not exceeding level 3 on the standard scale and, for continued


 
 

S.C.D.  Standing Committee Proceedings: 20th July 2006            

533

 

Company Law Reform Bill[ [], continued

 
 

contravention, to a daily default fine not exceeding one-tenth of level 3 on the

 

standard scale.’.

 


 

Entries of satisfaction and release

 

Margaret Hodge

 

Added  nc319

 

To move the following Clause:—

 

‘(1)    

Subsection (2) applies if a statement is delivered to the registrar verifying with

 

respect to a registered charge—

 

(a)    

that the debt for which the charge was given has been paid or satisfied in

 

whole or in part, or

 

(b)    

that part of the property or undertaking charged has been released from

 

the charge or has ceased to form part of the company’s property or

 

undertaking.

 

(2)    

The registrar may enter on the register a memorandum of satisfaction in whole or

 

in part, or of the fact part of the property or undertaking has been released from

 

the charge or has ceased to form part of the company’s property or undertaking

 

(as the case may be).

 

(3)    

Where the registrar enters a memorandum of satisfaction in whole, the registrar

 

shall if required send the company a copy of it.’.

 


 

Rectification of register of charges

 

Margaret Hodge

 

Added  nc320

 

To move the following Clause:—

 

‘(1)    

Subsection (2) applies if the court is satisfied—

 

(a)    

that the failure to register a charge before the end of the period allowed

 

for registration, or the omission or mis-statement of any particular with

 

respect to any such charge or in a memorandum of satisfaction—

 

(i)    

was accidental or due to inadvertence or to some other sufficient

 

cause, or

 

(ii)    

is not of a nature to prejudice the position of creditors or

 

shareholders of the company, or

 

(b)    

that on other grounds it is just and equitable to grant relief.

 

(2)    

The court may, on the application of the company or a person interested, and on

 

such terms and conditions as seem to the court just and expedient, order that the

 

period allowed for registration shall be extended or, as the case may be, that the

 

omission or mis-statement shall be rectified.’.

 



 
 

S.C.D.  Standing Committee Proceedings: 20th July 2006            

534

 

Company Law Reform Bill[ [], continued

 
 

Consequence of failure to register charges created by a company

 

Margaret Hodge

 

Added  nc321

 

To move the following Clause:—

 

‘(1)    

If a company creates a charge to which section (Charges created by a company)

 

applies, the charge is void (so far as any security on the company’s property or

 

undertaking is conferred by it) against—

 

(a)    

a liquidator of the company,

 

(b)    

an administrator of the company, and

 

(c)    

a creditor of the company,

 

    

unless that section is complied with.

 

(2)    

Subsection (1) is subject to the provisions of this Chapter.

 

(3)    

Subsection (1) is without prejudice to any contract or obligation for repayment of

 

the money secured by the charge; and when a charge becomes void under this

 

section, the money secured by it immediately becomes payable.’.

 


 

Companies to keep copies of instruments creating charges

 

Margaret Hodge

 

Added  nc322

 

To move the following Clause:—

 

‘(1)    

Every company shall cause a copy of every instrument creating a charge,

 

including every order or notice a copy of which has been delivered to the

 

company under section (Northern Ireland: registration of certain charges etc.

 

affecting land)(3)(b), requiring registration under this Chapter to be kept at its

 

registered office.

 

(2)    

In the case of a series of uniform debentures, a copy of one of the debentures of

 

the series is sufficient.’.

 


 

Company’s register of charges

 

Margaret Hodge

 

Added  nc323

 

To move the following Clause:—

 

‘(1)    

Every limited company shall keep at its registered office a register of charges and

 

enter in it—

 

(a)    

all charges specifically affecting property of the company, and

 

(b)    

all floating charges on the whole or part of the company’s property or

 

undertaking.

 

(2)    

The entry shall in each case give a short description of the property charged, the

 

amount of the charge and, except in the cases of securities to bearer, the names of

 

the persons entitled to it.


 
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