Assets and Priorities
ASSETS ON THE BALANCE SHEET
Asset Security Interest Perfection
Usual practice is to register charges over assets S.859 CA 2006: all securities registered @ CH:
This is the case in spite of the Financial Collateral (1) Send MR01, certified copy of security doc & fee;
All assets Regulation that covers: (2) 21 days beginning w/t 1 day after charge created
Bonds, cash and shares (3) otherwise security is VOID against liquidator and debt becomes immediately
repayable
Legal Mortgage
(1) transfer shares into bank’s name
(2) issue new share certificate to bank
Investment in Legal mortgage; or (3) register the ban as owner in registers of members of subsidiaries
subsidiaries Equitable mortgage; or Equitable Mortgage/fixed charge
Fixed charge (1) share certificate deposited w/t bank for safekeeping
(2) Stock Transfer Form: executed but undated
(3) Power of Attorney so that bank can complete the STF
Properties Charge by way of legal mortgage – s.87 LPA 1925 Register at Land Registry (registered land)
Future Prop. Charge by way of legal mortgage – s.87 LPA 1925 Further Assurances clause allows bank to upgrade fixed charge to CBWLM
Co to enter into Supplemental Debenture -> creates CBWLM
If not -> Further Ass. + PoA clauses allow bank to perfect security
Receivables Fixed charge; or Legal assignment – s.136 LPA 1925 Notice
(debtors) Legal assignment (1) Notice of assignment or charge to other party
Fixed Charge
NB: always check if assets/contracts are assignable (1) Notice is a matter of good practice, not a requirement
Investments Legal mortgage; or Same as investment above
(if portfolio not Equitable mortgage; or
trading Fixed charge NB: if foreign law security were taken, foreign law advice would be needed as to
frequently) NB: foreign shares -> foreign security to be created perfection requirement
over asset(s) + foreign lawyers needed (exp’s)
Cash & cash Floating charge Floating charge => Companies House registration
equivalents Fixed charge only re deposit a/c Fixed charge => notice to bank (good practice!)
Machinery Fixed charge Affix a notice on the machinery?
Stock/inventory Floating charge Floating charge => Companies House registration
ASSETS ON THE BALANCE SHEET
Asset Security Interest Perfection
Usual practice is to register charges over assets S.859 CA 2006: all securities registered @ CH:
This is the case in spite of the Financial Collateral (1) Send MR01, certified copy of security doc & fee;
All assets Regulation that covers: (2) 21 days beginning w/t 1 day after charge created
Bonds, cash and shares (3) otherwise security is VOID against liquidator and debt becomes immediately
repayable
Legal Mortgage
(1) transfer shares into bank’s name
(2) issue new share certificate to bank
Investment in Legal mortgage; or (3) register the ban as owner in registers of members of subsidiaries
subsidiaries Equitable mortgage; or Equitable Mortgage/fixed charge
Fixed charge (1) share certificate deposited w/t bank for safekeeping
(2) Stock Transfer Form: executed but undated
(3) Power of Attorney so that bank can complete the STF
Properties Charge by way of legal mortgage – s.87 LPA 1925 Register at Land Registry (registered land)
Future Prop. Charge by way of legal mortgage – s.87 LPA 1925 Further Assurances clause allows bank to upgrade fixed charge to CBWLM
Co to enter into Supplemental Debenture -> creates CBWLM
If not -> Further Ass. + PoA clauses allow bank to perfect security
Receivables Fixed charge; or Legal assignment – s.136 LPA 1925 Notice
(debtors) Legal assignment (1) Notice of assignment or charge to other party
Fixed Charge
NB: always check if assets/contracts are assignable (1) Notice is a matter of good practice, not a requirement
Investments Legal mortgage; or Same as investment above
(if portfolio not Equitable mortgage; or
trading Fixed charge NB: if foreign law security were taken, foreign law advice would be needed as to
frequently) NB: foreign shares -> foreign security to be created perfection requirement
over asset(s) + foreign lawyers needed (exp’s)
Cash & cash Floating charge Floating charge => Companies House registration
equivalents Fixed charge only re deposit a/c Fixed charge => notice to bank (good practice!)
Machinery Fixed charge Affix a notice on the machinery?
Stock/inventory Floating charge Floating charge => Companies House registration
