Where a lender advances a loan to a company incorporated in England and Wales, which is secured by real estate in England, the lender must ensure that the security is registered at Companies House and HM Land Registry within a prescribed time period to ensure that its interests are fully protected. Many parties could struggle to meet the deadlines during the Covid-19 pandemic, however lenders could be assisted by recent proposals that (i) might extend the timings for Companies House filings and (ii) temporarily relax HM Land Registry’s execution requirements.
These posts comprise two parts – this part 1 post covers security registrations at Companies House and our subsequent part 2 post covers security registrations at HM Land Registry.
Companies House – 21 days to register security
Any security over real estate created by a company incorporated in England and Wales should be registered at Companies House within 21 days of its creation. If the security is not registered within this timeframe then it is considered void against any liquidator, administrator or creditor of the company.
However, in recognition of the difficulties currently experienced as a result of Covid-19, the Corporate Insolvency and Governance Bill, which is currently being considered in Parliament, gives the Secretary of State the power to extend the 21 day deadline to a maximum of 42 days.
The Secretary of State might only extend the deadline if it is clear that parties are struggling to meet the current timings. However, this could be difficult to demonstrate, given that most lenders and their solicitors have, in practice, been able to register security online with Companies House (as set out below). We always recommend registering any security as soon as possible within the 21 day period, however it is worth watching whether any extensions arise from the Corporate Insolvency and Governance Bill, in case extra breathing space is afforded to lenders.
How can I register security at Companies House?
Lenders (or usually their solicitors) can register the security:
- online by completing a web based form, uploading a copy of the security agreement and paying a £15 registration fee; or
- by submitting a paper form, together with a certified copy of the security agreement and a cheque for a £23 registration fee.
What do lenders have to do before the deadline?
Importantly, lenders will meet the deadline as long as the (i) online form is submitted within the 21 day deadline or (ii) paper form and attachments arrive at the relevant Companies House office when it is open to receive documents. As long as the forms are properly completed with the required attachments and received by Companies House before the deadline, then it does not matter if Companies House do not process the registration until after the current 21 day deadline.
We always recommend registering any security as soon as possible within the 21 day period, however it is worth watching whether any extensions arise from the Corporate Insolvency and Governance Bill, in case extra breathing space is afforded to lenders.