New regulations, which will come into force in April 2013, will modernise and simplify the process of registration of security at Companies House for UK companies and LLPs. The regulations will introduce a single UK-wide system of security registration which can be filed electronically.
The new system will allow only a certified copy of the security instrument (rather than the original) to be filed together with a brief statement of particulars. The full text of the security instrument will be available at Companies House and each charge will be allocated a unique reference code once registered so that the process of searching for registered charges will be simplified. All charges will now need to be registered except for those specifically excluded in the regulations (eg rent deposit deeds).
It is not proposed that the tight deadline of 21 days for registration be extended but the new regulations have sought to clarify any ambiguities in the filing process by stating that the registration period will begin with the day after the date of the creation of the charge.
There will no longer be criminal sanctions for failing to register in time but it is worth noting that an unregistered security may still be invalid against a liquidator, administrator or creditor of the security provider.
The regulations also clarify the information required for the notification of a receiver or manager pursuant to a charge and for the satisfaction and release of security. Parties should also bear in mind that, where a negative pledge is registered, this will be sufficient to give rise to constructive notice to subsequent lenders.