The Companies Act 2014 has introduced a number of changes aimed at simplifying the registration of charges and clarifying the law governing the priority of charges. However, the basic requirement to register a security interest created by a company within 21 days of its creation in the Companies Registration Office (CRO) remains.
Procedure for registration of charges
The existing procedure for registering a charge (One-Stage Procedure) has been retained under the Act. However, a new procedure (Two-Stage Procedure) is now available, and the differences between the two procedures are summarised below:
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Under the Two-Stage Procedure, should the company fail to file the Second Filing within the prescribed time limit, the CRO will automatically remove the First Filing from the register. If the Second Filing is filed by the company, then the date of registration of that charge shall be the date of the First Filing. Use of the Two-Stage Procedure will allow lenders to secure priority before the charge is actually created.
Changed priority rules
The Act now clearly sets out that the relevant date for establishing the priority of charges is the date (and time, if two charges are registered on the same date) on which the particulars of the charge are received by the Registrar in the CRO.
Charges created by foreign companies
Under the Act, charges created by foreign companies over Irish property/assets can only be registered with the CRO where the foreign company has registered a branch in Ireland. A practice had arisen in Ireland, following a decision in the English High Court in the Slavenburg Case, whereby foreign companies with no branch registration (and therefore no registration number) recorded charges created on a separate file called a “Slavenburg file”. The prohibition on non-registered branches filing charges effectively abolishes Slavenburg filings and means that foreign companies without a branch registration in Ireland will no longer have any means by which to have the creation of a charge recorded by the CRO.