Registering a Charge
Many companies take loans or mortgages and find ways to borrow money which can result in the creation of a charge. Well, what’s a charge I hear you ask? A charge refers to the rights given to a lender in exchange for a loan and the rights given to the lender are a form of security given over the company’s assets.
Charges need to be registered at Companies House and it used to be a criminal offence to fail to do so. Although it is now no longer a criminal offence, neglecting to do so can be disastrous as it can void the security over the company’s assets. Therefore it is quite sensible to file the necessary form and accompanying documentation to register the charge otherwise it will be considered “unsecured.”
The company or a person interested in the charge can register it at Companies House. You normally have 21 days to register a charge with Companies House from the date the charge is created. The 21 day period can be extended, for example if you accidentally forgot to file the charge, by making an application to the Companies Court (now part of the Insolvency and Companies List, a specialist court within the Chancery Division of the High Court of Justice of England and Wales).
If you are intending to file within the 21 day deadline, you will need to complete an MR01 form (if you are filing for a private company) detailing useful information like the date the charge was created. You will also need to provide the name of the person/company entitled to the rights given over the company’s assets and a description of the charge as well. You need to obtain a certified copy of the document that was used to support the creation of the charge and this will need to be filed with the form.
A fee will be payable to Companies House and the amount will depend on whether you are filing electronically or paper filing. Once the form is accepted by Companies House they will issue a certificate noting that the charge has been registered. The charge will be allocated a special 12 digit code for reference and this will appear on the certificate. The certificate will need to be kept safe in the event that the charge is ever amended or the terms updated or if the charge is satisfied.
If you want help registering a charge or have any queries about registering a charge or need more information about registering charge then get in touch with M & N Group Limited.