Proposed changes to Part 25 Companies Act 2006 What this may mean for company charges

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Posted in:Corporate and Commercial|February 13, 2013 | Join the mailing list

The Department for Business, Innovations and Skills ("BIS") has recently published their revised draft of the Companies Act 2006 (Amendment of Part 25) Regulations 2013 ("Regulations").  If these Regulations obtain Parliamentary approval
they should come into force in April of this year replacing the current Part 25 of the Companies Act 2006 which deals with company charges.
 
The aims behind the Regulations are to:

• streamline procedures via electronic filing to make a more cost effective system;
• reduce the uncertainty around what charges need to be registered;
• create a single scheme for all UK registered companies;
• improve the quality of information provided for the security created; and
• improve access to the instruments creating company charges.
 
The key changes under the Regulations are currently as follows:

• It will no longer be a criminal offence to fail to register a charge. 
• The scheme for registration will be the same nationwide. 
• When registering a charge original copies of the relevant document creating the charge will no longer need to be sent; a certified copy will suffice. 

• Certified copies may be filed electronically in PDF format up to a maximum file size of 10MB, and will be placed on the public record from where it can be downloaded. 

• Where documents contain sensitive information, for example personal information relating to an individual (other than the name), intellectual property details and any bank or security account information of either an individual or a company, the document
may be redacted. 
• The regulations assume that all charges can be registered. 
• Companies House has produced a new set of forms including forms for both when there is or is not an instrument creating the charge. (There are different forms for LLPs and companies). 

The new Regulations will apply to any charges created on or after 6 April 2013.  The new forms for entries of satisfaction and release of security will also take effect from 6 April 2013 and apply to all charges irrespective of when they
are created.  It should be noted however that the information required will differ according to when the original charge came into existence.

Although it remains uncertain whether the draft will be passed in its current format the modernisation for registering a charge seems inevitable.  Accordingly, businesses will have to be aware of the change in scheme and as of April potentially
use the new e-system when registering a charge.

Should you have any concerns regarding a current charge, or seek guidance and advice in relation to new charges and the information required for registration please contact Stephen Foster, Head of Corporate at
stephenf@berg.co.uk or by telephoning 0161 833 9211.

The information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Berg or any of its partners or employees. Professional
legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

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