Company Law Reform Bill [Lords]


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New Clause 317

The period allowed for registration
‘(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.’.—[Margaret Hodge.]
Brought up, and added to the Bill.

New Clause 318

Registration of enforcement of security
‘(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 contravention, to a daily default fine not exceeding one-tenth of level 3 on the standard scale.’.—[Margaret Hodge.]
Brought up, and added to the Bill.

New Clause 319

Entries of satisfaction and release
‘(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.’.—[Margaret Hodge.]
Brought up, and added to the Bill.

New Clause 320

Rectification of register of charges
‘(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.’.—[Margaret Hodge.]
Brought up, and added to the Bill.

New Clause 321

Consequence of failure to register charges created by a company
‘(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.’.—[Margaret Hodge.]
Brought up, and added to the Bill.

New Clause 322

Companies to keep copies of instruments creating charges
‘(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.’.—[Margaret Hodge.]
Brought up, and added to the Bill.

New Clause 323

Company’s register of charges
‘(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.
(3) If an officer of the company knowingly and wilfully authorises or permits the omission of an entry required to be made in pursuance of this section, he commits an offence.
(4) A person guilty of an offence under this section is liable—
(a) on conviction on indictment, to a fine;
(b) on summary conviction, to a fine not exceeding the statutory maximum.’.—[Margaret Hodge.]
Brought up, and added to the Bill.

New Clause 324

Right to inspect instruments which create charges, etc.
‘(1) The copies of instruments creating any charge requiring registration under this Chapter with the registrar, and the register of charges kept in pursuance of section (Company’s register of charges), shall be open during business hours (but subject to such reasonable restrictions as the company in general meeting may impose, so that not less than 2 hours in each day be allowed for inspection) to the inspection of any creditor or member of the company without fee.
(2) The register of charges shall also be open to the inspection of any other person on payment of such fee for each inspection as the company may prescribe.
(3) If inspection of copies, or of the register, is refused an offence is committed by—
(a) the company, and
(b) every officer of the company who is in default.
(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 and, for continued contravention, a daily default fine net exceeding one-tenth of level 3 on the standard scale.
(5) If such a refusal occurs, the court may by order compel an immediate inspection of the copies or register.’.—[Margaret Hodge.]
Brought up, and added to the Bill.

New Clause 325

Charges created by a company (No.2)
‘(1) A company that creates a charge to which this section applies must deliver the prescribed particulars of the charge, together with a copy certified as a correct copy of the instrument (if any) by which the charge is created or evidenced, to the registrar for registration before the end of the period allowed for registration.
(2) Registration of a charge to which this section applies may instead be effected on the application of a person interested in it.
(3) Where registration is effected on the application of some person other than the company, that person is entitled to recover from the company the amount of any fees properly paid by him to the registrar on the registration.
(4) If a company fails to comply with subsection (1), an offence is committed by—
(a) the company, and
(b) every officer of the company who is in default.
(5) A person guilty of an offence under this section is liable—
(a) on conviction on indictment, to a fine, and
(b) on summary conviction, to a fine not exceeding the statutory maximum.
(6) Subsection (4) does not apply if registration of the charge has been effected on the application of some other person.
(7) This section applies to the following charges—
(a) a charge on land or any interest in such land, other than a charge for any rent or other periodical sum payable in respect of the land,
(b) a security over incorporeal moveable property of any of the following categories—
(i) goodwill,
(ii) a patent or a licence under a patent,
(iii) a trademark,
(iv) a copyright or a licence under a copyright,
(v) a registered design or a licence in respect of such a design,
(vi) a design right or a licence under a design right,
(vii) the book debts (whether book debts of the company or assigned to it), and
(viii) uncalled share capital of the company or calls made but not paid,
(c) a security over a ship or aircraft or any share in a ship,
(d) a floating charge.’.—[Margaret Hodge.]
Brought up, and added to the Bill.

New Clause 326

Charges which have to be registered: supplementary (No. 2)
‘(1) A charge on land, for the purposes of section (Charges created by a company (No. 2))(7)(a), includes a charge created by a heritable security within the meaning of section 9(8) of the Conveyancing and Feudal Reform (Scotland) Act 1970.
(2) The holding of debentures entitling the holder to a charge on land is not, for the purposes of section (Charges created by a company (No. 2))(7)(a), deemed to be an interest in land.
(3) It is immaterial for the purposes of this Chapter where land subject to a charge is situated.
(4) The deposit by way of security of a negotiable instrument given to secure the payment of book debts is not, for purposes of section (Charges created by a company (No. 2))(7)(c)(vii), to be treated as a charge on those book debts.
Brought up, and added to the Bill.
 
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Prepared 21 July 2006