From 1 October 2011, overseas companies with a registered UK establishment will no longer be required to submit details of security they create over assets in the UK for registration with Companies House. Form OSMG01 will therefore become obsolete. Instead, such companies are required to maintain an in-house register of certain security interests they create (over land, IP, ships, aircraft and any floating charges) and to make details of the contents of such registers available for inspection.
This change will remove any argument about the need for "son-of-Slavenburg" applications - i.e. submitting documents even where a search of Companies House records reveals no UK registered establishment. Some have continued to submit applications in these circumstances, although the benefit of such action has never been clear.
Companies House search against registered UK establishment will reveal any security granted prior to 1 October 2011;
Search of register maintained by charger under reg. 24 of the 2009 Regulations will reveal security over land, ships, aircraft, IP rights and certain floating charges;
Land Registry search against title number will reveal any fixed charges;
Search against various IP registries will reveal certain IP rights subject to existing security; and
Search (by asset number) of aircraft and ship mortgage registers will reveal security over relevant asset.
Overseas companies with a UK registered establishment must maintain a register of:
a.any charges over land situated in the UK or any interest in such land;
b.any charges over ships, aircraft or IP rights registered in the UK; and
c.any floating charges (but not floating charges which expressly exclude all assets of the charger situated in the UK or which purport to be a fixed charge).
Other charges (e.g. fixed charge over assets other than land, ships, aircraft or IP rights) are not required to be recorded in the register.
The overseas company must enter details of the relevant charge in the register within 21 days of its creation. It must also notify the registrar of the location of the register and any relevant documents within 21 days of the first entry in the register.
Note that there is no "invalidity sanction" for failure to enter details in the register - the company and its directors commit an offence but the validity of un-recorded security is not affected. Failure to register will of course adversely affect future lenders who may then be unaware of security granted to earlier creditors which will take priority.
It will be possible to search the mortgages and charges register of an overseas company by following the procedure specified in the 2009 Regulations:
10 business days' notice must be given; and
the search must be conducted between 9am and 5pm (UK time) on a UK business day.
The requirement for 10 business days' notice may cause difficulties on urgent transactions. However, the Amending Regulations make provision for "electronic" searching of the register where both parties agree.
The Amending Regulations remove the mechanism for filing forms OSMG02/OSMG04 regarding the release/satisfaction of charges granted by overseas companies. Companies House has confirmed that it will continue to accept these forms in respect of charges granted before 1 October 2011.