Registration of Charges
Registration of Charges
When a security interest of any nature is granted by a “company” (within the meaning of the term “company” pursuant to the Companies Act 1981) over its assets, wheresoever such assets may be located, the said security interest may be registered as a charge pursuant to Section 55 of the Companies Act 1981. Registration of a charge pursuant to Section 55 of the Companies Act, 1981 is not mandatory but once a charge is registered it is given priority over all subsequently registered charges and all unregistered charges. Priority is granted from the date of registration and registration does not affect the validity of a charge under Bermuda law.
The Register of Charges is maintained by the Registrar of Companies in Bermuda and a record is made on that Register of all charges or liens filed or registered against a Bermuda company or the Bermuda assets of a foreign corporation.
The procedure for registering charges requires that the appropriate Government Form (Form No. 9) is completed by the company or its authorized attorney or agent seeking to register the charge and it should be accompanied by the original Instrument creating the charge together with two copies. The aforementioned documents must be delivered to the Registrar accompanied by the prescribed fee.
Amendment of Register
Where a registered charge requires amendment by adding or removing one or more persons entitled to the charge, or where the interest of one or more persons entitled to the charge is assigned or transferred, any person, including the company, interested in the charge may apply to have such amendment, assignment or transfer in such form as may be prescribed.
Any registration of an amendment or an assignment or transfer of an interest in a registered charge shall not affect the priority of the charge, and the charge shall continue to have priority based on the date that it was registered and not the date that any document effecting the amendment, assignment or transfer was executed or that the amendment, assignment or transfer was registered.
Satisfaction or Release of Charge
Upon evidence being given to the Registrar of Companies with respect to any registered charge that the debt for which the charge was given has been paid or satisfied in whole or in part or that part of the property or undertaking charged has been released from the charge or has ceased to form part of the company’s property or undertaking, the Registrar of Companies shall enter on the Register a Memorandum of Satisfaction in whole or in part, or of the fact that part of the property or undertaking has been released from the charge or has ceased to form part of the company’s property or undertaking. Where the Registrar of Companies enters a Memorandum of Satisfaction in whole he shall, if required, furnish the Company with a copy thereof.
Contact us for legal assistance with registering a charge pursuant to the Companies Act 1981.