New provisions relating to the registration of charges or mortgages created by overseas companies came into effect on 1 October 2011.
Under the Overseas Companies (Execution of Documents and Registration of Charges) (Amendment) Regulations 2011, overseas companies will no longer need to register charges or mortgages made against property in England & Wales at Companies House.
What is an overseas company?
The term 'overseas company' refers to any company which is incorporated outside the United Kingdom. So for example the term would include a company incorporated in Jersey or Guernsey. However, it would exclude companies incorporated in Scotland or in Northern Ireland.
The Slavenburg Register
The Slavenburg system was introduced by the Companies Act 1985 to clarify the position for overseas companies following the case of Slavenburg's Bank NV v Intercontinental Natural Resources.
The Companies Act 1985 required that overseas companies provided details of charges over assets situated in England and Wales to Companies House within 21 days of creation. These details were then placed on the "Slavenburg Register" which was a public register. The register was aimed to prevent charges becoming voice against a liquidator, administrator or creditor of the company.
Changes in the law
The first change took place in 2009 when new regulations were introduced requiring that only companies with an established place of business in England & Wales would need to register charges granted over UK asset at Companies House. Under that regime, companies without an established place of business would not be able to register a charge at Companies House.
The new rules mean that with effect from 1 October 2011, there is no longer any requirement for overseas companies to register the charge at Companies House. However, if an overseas company has an established place of business in the UK then it will be required to keep a register of charges available for inspection. Charges created on or after 1 October 2011 must be entered into that register within 21 days of creation with a copy of the charge document.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.