Section 225 of the Companies Act 1997 requires the Registrar to keep a public record of every registered charge.
Section 225(2) — the particulars
For a series of debentures — the particulars in the section 222(6) notice. For any other charge —
(i) where created by the company, the date of its creation;
(ii) where the charge existed on property acquired by the company, the date of the acquisition;
(iii) the amount the charge secures;
(iv) a description sufficient to identify the property charged;
(v) the name of the person entitled to the charge;
(vi) the details of any assignment or variation.
The Registrar shall issue a certificate in the prescribed form of every registration, stating where applicable the amount secured — and the certificate is conclusive evidence that the requirements as to registration have been complied with.
Once the certificate issues, the adequacy of the registration cannot be attacked. A lender should obtain and keep it — it is the answer to any later argument by a liquidator that the notice was defective.
Note the significance of the time and date recorded: it fixes the point from which the charge is registered, which matters for priority under section 231 and Schedule 15.
Sections 225(5) to (8) — provisional entries
Where a notice under section 222, 223 or 224 is not accompanied by —
(i) a certificate in the prescribed form that all accompanying documents have been duly stamped as required by the Stamp Duties Act (Chapter 117), or are not required to be stamped; or
(ii) evidence that they have been duly stamped,
the Registrar shall enter the time and date of lodgement and the section 225(2) particulars, but shall enter the word “provisional” against that entry.
Section 225(6) allows the same treatment where the Registrar refuses to register documents under section 396(2) — the Registrar may, at his discretion, enter the time, date and particulars provisionally.
Where “provisional” is entered and, within one month or such further period as the Registrar allows, the stamp duty certificate or evidence is supplied, or the refused documents are resubmitted and registered, the Registrar shall delete the word “provisional”.
If not, the Registrar shall delete from the register all the particulars entered in relation to that charge, variation or assignment.
While “provisional” is entered, the charge, variation or assignment shall be deemed not to have been registered. But where the word is deleted under subsection (7), it is deemed to be registered and to have been registered from and including the time and date originally specified.
So the lodgement date is preserved — but only if the defect is cured in time. A lender who leaves a provisional entry uncured loses the entry altogether, and with it the protection of section 222: the charge becomes void against the liquidator and any creditor.
Check the register after lodging. A provisional entry looks like a registration to the careless eye, and is not one.
Section 226 — endorsement on debentures
The company shall cause to be endorsed on every debenture forming one of a series, and on every certificate of debenture stock, the payment of which is secured by a registered charge, (a) a copy of the certificate of registration, or (b) a statement that registration has been effected and its date. This does not apply to debentures issued before the charge is registered.
A person who knowingly authorises or permits the giving of an unendorsed debenture or certificate commits an offence, penalty under section 413(1).
Section 228 — extension of time and rectification
(a) that an omission to submit a charge, assignment or variation within the time required, or an omission or misstatement of any particular in the register or in a section 227 memorandum, (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; or
(b) that on other grounds it is just and equitable to grant relief,
the Registrar may, on the application of the company or a person interested, and on such conditions as the Registrar thinks fit, grant relief or rectify the register.
Unusually, the primary application is to the Registrar, not the Court. Under section 228(2), a person dissatisfied with the Registrar’s decision may apply to the Court, which may order the Registrar to grant relief or rectify the register. Under section 228(3), no order for costs shall be made against the Registrar on such an application.
This is the route for a missed two-month deadline. It is not automatic — relief may be granted on conditions, and the usual condition protects rights acquired in the meantime, so intervening creditors and charges are not displaced.
Section 229 — documents made outside the country
Where a document is required to be submitted within a specified time, that time is, by force of this section, in relation to an instrument, deed, statement or other document executed or made outside the country, extended by one month or such further period as the Registrar from time to time allows.
The extension is automatic — no application is needed for the first month. So a charge document executed abroad has three months rather than two.
Section 230 — anyone interested may register
Any person interested in a charge or other document required to be registered under this Part may submit it for registration, and is entitled to recover from the company the amount of any fees properly paid.
Section 222(1) places the obligation on the company — but it is the chargee who loses the security if it is not done. Section 230 lets the chargee register the charge itself and recover the fee.
The invariable practice for a lender should be: register the charge yourself within two months, obtain the section 225(3) certificate, and confirm the entry is not marked “provisional”.
Sources
- Companies Act 1997 — ss 222–231, 396, 413, 414; Schedule 15
- Instruments Act (Chapter 254)
Before relying on anything here, read the current text of the Companies Act 1997 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.