Guidance

Rectification of Charges: Part 2 (Charges created on or after 6 April 2013)

Published 24 February 2016

1. Rectifying the Register on charges created on or after 6 April 2013

1.1 Applying to the court to rectifiy charge information for charges created on or after 6 April 2013

The provisions of sections 873/888 (rectification of Register of Charges) of Part 25 of the Companies Act 2006 (‘the Act”) continue to apply to charges which are created before 6 April 2013.

The provisions of section 859M (Rectification of Register) of the Act applies to information contained within a statement or notice delivered to the Registrar of Companies in accordance with the provisions of Chapter A1 of Part 25 of the Act in respect of charges created on or after 6 April 2013.

The following are examples of anticipated rectification applications we expect to receive, which are based upon our experiences under the charges regime before 6 April 2013.

Example 1 - Mis-statement of a particular of a charge delivered under section 859A

After registration of a charge, a Presenter realises that a particular submitted on the Statement of Particulars (form MR01), as set out under section 859D is incorrect (eg the short description of information delivered pursuant to S859(2)(d) is incorrect). The Registrar has no power to rectify such errors, so the Presenter has an option to apply to the court to ask for an order that the mis-statement is rectified pursuant to section 859M.

Example 2 - Omission of a particular of charge delivered under section 859A

After registration, a Presenter realises that they have omitted to tick the box on the Statement of Particulars (form MR01) delivered under section 859A, to confirm that a floating charge is contained within the instrument. The Registrar has no power to correct this omission, so the Presenter has an option to apply to the court for an order that the omission is rectified pursuant to section 859M.

Example 3 - Mis-statement of an entry of satisfaction and release delivered pursuant to section 859L

After registration, a Presenter realises that a statement of satisfaction (form MR04) filed in relation to a charge delivered under section 859L is incorrect. The statement filed confirms that the debt for which the charge was given has been satisfied in full, when it has only been satisfied in part. The Registrar has no power to rectify the error, so the Presenter has an option to apply to the court to ask for an order that the mis-statement is rectified pursuant to section 859M.

1.2 Court Application

The provisions of section 859M allow an application to be made to the court, either by the company creating the charge, or by a person interested in it. It is our view that the Registrar of Companies should be joined as a defendant to the claim so that he has an opportunity to consider and comment on the application prior to the hearing.

Upon the court making an Order for rectification, a sealed copy should be sent to the Registrar. The Registrar will rectify the error as required by the Order and will then place the Order on the company record so searchers will be able to read it and understand the effect of the rectification.

Section 859N

There is also a power under s859N to apply to court to remove and replace an instrument or debenture which has been delivered to the Registrar under Chapter A1.

2. Background information and legislation

Further information on the registration of charges can be found in Part 25 of the Companies Act 2006 (as amended by The Companies Act 2006 (Amendment of Part 25) Regulations 2013).