Once a company has formally entered into a debenture, it is the company’s responsibility to register the details of any charge contained in the debenture at Companies House. You should do so within 21 days of creating that charge by delivering a prescribed registration form along with a certified copy of the debenture and registration fee to Companies House.
- we advise our lender clients that, if a charge contained in a debenture is not registered at Companies House, it will become void against an administrator or liquidator of the company, and against any person who has an interest in the charged asset under the debenture. This means that if the company goes becomes insolvent, an administrator or liquidator can ignore an unregistered charge in a debenture and treat the creditor as an unsecured creditor;
- when a charge becomes void, the money secured by it becomes repayable immediately by the company;
- as the consequences of non-registration of a debenture could be serious for the creditor, in practice the lender will normally register the debenture themselves.
The company should also keep details of any charges within debentures it creates in the company’s own register of charges kept at its registered office.
We often get asked by our lender clients how a debenture holder enforce their security. If the lender has a qualifying floating charge then it usually has the right to appoint an administrator to take control of the company if it defaults on the loan.
An administrator appointed under the debenture must hand over the proceeds of assets charged by the debenture to the lender. Usually the lender agrees for the administrator to sell the assets for them for a fee.
Please contact one of our expert debenture lawyers now for your friendly informal consultation. At Francis Wilks & Jones, we have significant experience in debentures and deal regularly with Companies House in registering charges. We are highly experienced and have helped many lender and companies secure their loans by registering their debentures. We offer quick and effective advice on debentures.