How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Alex J. Your Own Question
Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3843
Experience:  Solicitors 2 years plus PQE
Type Your Law Question Here...
Alex J. is online now

Stuart, , I have a company that has been trading . We have

This answer was rated:

Hi Stuart,
I have a company that has been trading for 18months.
We have taken on some loans from the investors over last 6 months.
In a board meeting today, it was agreed that these would be long term loans and be formally recognised as debentures and be floating charges over the business.
We need to register these charges at Companies House.
The 3 loans are for
£15,000 to a company
£18,000 to a private investor
£26,000 to a private investor
Please could you advise what we need to do and the cost to register these 3 debentures with companies house, all to be a floating charge against the business.
Also my question is as follows - as these loans were given some months ago but they were only recognised by the company as floating charges today would they fall out of the 21days we have to register them?
If the do fall out of the 21days, we can repay these loans and re invest the money to start the 21 days again
I will look forward to your thoughts
With thanks
Hi, Thank you for your question and welcome. My name is ***** ***** I am a company law expert. As a first point, these fixed money charges are being secured by debenture, debentures are fixed and floating charges is that your intention?As you have missed the 21day to register is complicated, and you would need to make a court application (which is more of just a process - it involves a claim under Part 8 of the Civil Procedure Rules and requires a witness explaining that the failure to register was indavertent), but it is expensive and an administrative pain. If the money can be repaid and reinvested as fresh consideration for the loan that would be best.Baring in mind the loan and the debenture/charge are separate instruments, have debentures/charges been signed yet or are they all in the same document? The registration period is 21 days from the date the security (debenture/charge) is granted, not the date of the loan?
Customer: replied 1 year ago.
Hi Aj,
Ok assuming that the money is repaid and re invested as this would be the best and simplest way forward.
How do we proceed, basically the investors want security on their money as a floating charge over the company. The company doesn't have much in the way of assets, the money is in the book debt of the business.Assuming that the money is invested beginning of June what is the process that we have to go through......This is my understanding for each of the loans to be secured.I (as director) write a letter to each of the investors confirming how much they've invested, over what period and state they will have a floating charge over the business.I then need to get these as certified copies by a solicitor? And would they be certified from me and the company?I then have to submit to companies house this letter with a form - please advise which form reference number?Do I then need to get these forms also certified by a solicitorPlease also advise what the instrument is?I will look forward to your thoughtsWith thanks
Thank you. Ok - you can have a floating charge over book debts, when registering a floating charge you need to provide as much information as is required on the form MR01. In order to register the charge you must include a certified copy of the document that creates the charge - so yes this will have to be certified by a solicitor. If the letter you are going to write describes and states that as of the date of the loan you will create a floating charge over the assets of the company, then a certified copy of this letter will be sufficient - ultimately just a floating charge is an equitable instrument and it is still valid even if it is not registered it just wont be binding on the company creditors unless properly registered. You will also need to ensure that all the charges rank equally for payment, unless one charge holder insists that theirs is preferred? In the "Brief Description Box" - Make sure your write some similar to "FLOATING CHARGE OVER THE BOOK DEBTS OF THE COMPANY ONLY SECURING A TOTAL OF £X IN FAVOUR OF THE BORROWER - FULL DETAILS CONTAINED IN THE FACILITY LETTER ATTACHED".
Customer: replied 1 year ago.
Alex,Thanks for that, I've just a few more questions.1. Should I submit 1 MR01 form for each charge, it would seem sensible.
2. Charge creation date is can this be the date I write the letter 'instrument' from the company to the borrower, the money will go into the account this week but the letter won't be written until 1st June.
3. Names of persons etc. Entitled to the charge - is this the lenders name.
4. Brief description box you've answered above
5. Other charge on fixed security - it's just a floating charge - so assume this is no?
6. Negative pledge we will have 3 floating charges so assume the answer here is no too?
7. Trustee statements - assume leave blank
8. Signature - it should this be signed by a person with an interest in the charge, is that the lender of the money or an officer of the business.Finally the actual instrument, this will be on letter headed noted paper and please following
1. Does it have to bare interest
2. It should state the date borrowed, amount and repayment date.
3. It should state it's a floating chargeIs there anything else that should be in the letter from the business to the lender?Think that should then be it!With thanks
Hi, Thank you to answer your questions in turn:1. Yes you need a separate MR01 for each charge;2. The charge date should be the date of the Facility letter, assuming the facility letter contains the floating charge;3. The person entitled to the charge is the lender;4. Note I made an error above "BORROWER" should say "LENDER" my apologies;5. If it is just a floating charge answer no - if it is a debenture then answer yes:6. Yes this should be no as you have multiple charges;7. yes leave blank;8. This can be a director or the lender; The instrument;1. Interest is optional it is not a necessity - bare in mind the charge wont cover interest unless you state it in the particulars;2. Correct;3. Yes it must state it is secured by floating over the book debts - I presume not all the assets are included? Kind regardsAJ
Alex J. and other Law Specialists are ready to help you