Effect of registering security at Companies House on priority of security interests
Effect of registering security at Companies House on priority of security interests

The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:

  • Effect of registering security at Companies House on priority of security interests
  • Why is it important to determine priority between competing security interests?
  • Registration at Companies House
  • Consequences of failure to register security at Companies House
  • Effect on priority between competing security interests
  • Registration at Companies House—notice to other creditors
  • Will a secured creditor be deemed to have constructive notice of a negative pledge in a Form MR01 registered at Companies House?
  • Comparison between effect of registering security at Companies House and effect of registering security on an asset register
  • Comparison between effect of failure to register security at Companies House and effect of failure to register security on an asset register

Registration can have an important effect on the priority of competing security interests.

Broadly speaking, there are two systems for registration of security interests:

  1. registration against the entity providing the security, and

  2. registration against the asset which has been secured

This Practice Note is concerned with the first system of registration where the entity providing the security is a company formed and registered under the Companies Act 2006 (a 'UK company') and explains:

  1. the requirement to register at Companies House

  2. whether registration constitutes constructive notice to other creditors

  3. whether registration constitutes constructive notice to other creditors of a negative pledge

  4. the consequences of failure to register security at Companies House and the effect of registering security at Companies House as against the effect of registering security at other asset registries

For information about how registration against an asset affects priority of security interests, see Practice Notes:

  1. Effect of registering security at HM Land Registry/Land Charges Department on priority of security interests

  2. Effect of registering security on the UK Ship Register on priority of security interests

  3. Effect of registering security on the UK Register of Aircraft Mortgages on priority of security interests, and

  4. Effect of registering security at IP registries on priority of security interests

The rules governing priority of security interests generally are discussed in Practice Note: Priority between security interests.