Company Law

Rectification of Companies House Register of Charges

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Why Is There a Need to Fix a Company Charge or Legal Mortgage?

Where a UK Company (or LLP) is borrowing or guaranteeing finance (for example in order to secure a Company Loan or in connection with a Property, Freehold or Leasehold Purchase), it is standard practice for the security being granted by the Company (the Borrower, Mortgagor or Chargor), to be registered at Companies House, against the recipient’s or guarantor’s name (if a separate entity is providing a company guarantee that the loan will be paid) on the Charges Register.

The charge will be made in favour of the Lender, most often this party is the bank or financial institution who is advancing the funds (i.e. the Lender, who is known as the Mortgagee or Chargee).

The purpose of recording such information at Companies House is primarily to “put the World on notice” that the charge exists. It is also helpful for subsequent and potential lenders to assess a Company’s track record of borrowing and creditworthiness, as part of the Due Diligence process.

Companies House’s Role

Companies House operates as an independent publicly accessible recording department and most often records accurately-made submissions appropriately and within the prescribed timeframes. For example a Company mortgage or Debenture must be delivered to the Registrar at Companies House within 21 days beginning with the day after the date of creation of the charge and if delivered outside of the 21 days it will be rejected unless it is accompanied by a court order extending the time for delivery. There are a few exceptions to this, however, this is the norm.

The relevant form used to register a charge at Companies House is the MR01 Form (Note that a slightly different form for LLPs is used called the LLMR01).

Form MR01 can be found here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/537724/MR01_v2.1.pdf

Form LLMR01 can be found here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/533411/LL_MR01_v2.1.pdf

(NOTE: PLEASE ENSURE THAT UP TO DATE FORMS ARE USED WHEN SUBMITTING ONE OF THE MR01 FORMS FOR REGISTRATION)

A fee of £23 is payable to Companies House in respect of each mortgage or charge filed on paper. A lesser fee is charged by Companies House for filings made online.

Should you require assistance with a particular filing, we are happy to assist, however, please note that a fee will be charged for this service.

Fixing a Charge That Has Been Submitted To Companies House

If a form is filed late, or if mistakes are made on a submission then whilst the Companies House Mortgage Team are both helpful and accommodating to general enquiries, they play a more reactive role. They will either simply reject or accept a document once submitted and cannot correct an error over the phone or amend a charge without signed authority from either the original submitting party or the company itself.

Companies House has no legal authority to reject a properly delivered document and they refrain from offering any advice beyond their own regulations – always remember that they are not solicitors and the general public are not their clients.

So, is it possible to amend the Companies House register and rectify a charge once the charge has been submitted with incorrect information? Is it possible to extend the date for filing a charge, where the 21-day deadline has passed?

The answers to both questions are (often, but not always) YES, but expert assistance is needed.

Enter an expert Company solicitor…

If the particulars of a charge are incorrect on a charge registered by a company pursuant to Part 25 of the Companies Act 2006 (or equivalent provisions for LLPs) then you or your legal representative will need to make an application pursuant to section 873/888 of the Companies Act 2006 to rectify them.

The particulars of a Charge, which are often the cause of the error, are as follows:

  • Date of Creation of the Security (i.e. the date that the charge was first created)
  • Description of the instrument (if any) creating the charge
  • Amount secured (£)
  • Name and address of the person entitled to the charge (e.g. Mortgagee)
  • Short particulars of the property charged
  • Nature of the Charge itself (Fixed and/or Floating Charge and whether the Charge Contains a Negative Pledge which is a prohibition or restriction on the company from creating further security that will rank equally with or ahead of the charge)

If any of the above details are filed with incorrect details, there is a chance that either:

  • Companies House will reject the form filed and this delay may cause the applicant to lose the original filing period of 21 days, which may be extended only via a court order.
  • Companies House will accept the form filed with incorrect information recorded in the Charges register.
  • Companies House will process a notification of the “satisfaction” of a charge (i.e. where the charge can be removed, perhaps due to repayment of a loan), even where this has been made in error (an application pursuant to section 873/888 of the Companies Act to delete the entries made in error on the Register will be necessary).

In certain circumstances, including those listed above, the Companies Act 2006 (under sections s1072 - s1076 ‘Requirements for Proper Delivery’ and s1093 - s1098 ‘Correction or Removal of Material on the Register’) permits amendment of the Companies Register, either by submission of the corrected material, together with the submission of a specific numbered form or more usually, by Court order.

(Note: It is a criminal offence under s.1112 Companies Act 2006 for a person to ‘knowingly or recklessly deliver or cause to be delivered’ a document that is ‘misleading, false or deceptive’. The penalty is a sentence of up to two years in prison, and/or a fine.)

Rectification of the Companies House Register: What We Offer to Clients

Services, Fees & Expenses

Standard Service

  • Full Analysis of matter, Companies House register and charge materials
  • Preparation of all documentation
  • Liaising with all parties
  • Partner-level solicitor oversight
  • Court Advocacy and Attending Court
  • Regulated indemnity insurance-backed service
  • All cases managed from our Chancery Lane Office in Central London

FIXED FEE

£2,750 plus vat and disbursements
(Court Fee of £308.00, plus postage and courier fees)

Expedited Service

  • Full Analysis of matter, Companies House register and charge materials
  • Preparation of all documentation
  • Liaising with all parties
  • Partner-level solicitor oversight
  • Court Advocacy and Attending Court
  • Expedited Priority Processing Ahead of Standard orders
  • Regulated indemnity insurance-backed service
  • All cases managed from our Chancery Lane Office in Central London

FIXED FEE

£3,500 plus vat and disbursements
(Court Fee of £308.00, plus postage and courier fees)

Contact Us Today To Fix Your Legal Charge Mistake


Telephone: 020 8209 0166
Email: jabrams@gadlegal.co.uk

Timing

From file opening to the rectification of the Companies House register itself, usually takes 3 months.

We can work on an expedited basis, as agreed with the client (subject always to court timings) For example, we can have the court papers prepared and cases opened and managed on a priority basis. The Expedited Service is subject to an additional cost.

FREE Company Law Consultation

We are delighted to offer a free, no-obligation 30 minute Company Law issues, including Rectifying Companies House Charges.

Please get in touch via phone during office hours, on 020 8209 0166 or contact Jonathan Abrams by email on jabrams@gadlegal.co.uk

Please contact a member of our team:

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