UK’ Business F.A.Qs.

Limited Liability Partnership Registration of Mortgages and Charges (England and Wales)

Statutory Matters January 25th, 2009

A mortgage is security for the payment of a debt or other obligation that passes ‘property’ but no right to possession to the person to whom the mortgage is given.

A charge is security for the payment of a debt or other obligation that does not pass ‘property’ or any right to possession to the person to whom the charge is given.

Note: When the word ‘charge’ is used in this information from now on, it refers also to a mortgage.

What charges must be registered?

A list of the charges that must be registered in England and Wales and a brief explanation of each is shown in the box below:

A charge to secure any issue of debentures. A debenture is an instrument issued by the limited liability partnership as evidence of a debt or other obligation. It includes debenture stock, bonds and any other securities of the limited liability partnership, whether or not it forms a charge on the assets of the limited liability partnership.
A charge created or evidenced by an instrument, which, if executed by an individual, would require registration as a bill of sale. A bill of sale is an instrument creating or evidencing a charge or mortgage over goods, including fixtures and agricultural crops in certain cases, but not ships or aircraft.
A charge on land (wherever situated), or any interest in it, but not a charge for any rent or other periodical sum arising from land.
A charge on book debts of the limited liability partnership. Book debts are debts that in the ordinary course of a limited liability partnership’s business are commonly entered in its books.
A floating charge on the limited liability partnership’s undertaking or property. A floating charge is a charge that does not affect the assets charged until some event crystallises the charge, fixing it to a certain point in time.
A charge on a ship or aircraft or any share in a ship.
A charge on goodwill, or on a patent, trademark, registered design, copyright or design right or a licence under or in respect of any such right.

How much does each registration cost?

There is a fee of £13 for registering each Form LLP395, LLP397 and LLP400 delivered to Companies House. There is no fee for registering a declaration of satisfaction (Form LLP403a).

There is a fee of £15 for a certified copy of a charge registration. Companies House also offer a premium same-day registration service, which costs £50. These are available from the Certified Copies Team at Companies House, Cardiff.

What do ‘instrument’ and ‘evidence’ mean in this section?

An ‘instrument’ is usually a document in legible form but it can also exist in electronic form.

To ‘evidence’ means to provide proof of the existence of something.

Which form should I use?

The form numbers in this table correspond to the relevant sections of the Companies Act 1985 (as applied to limited liability partnerships by regulation 4 of the Limited Liability Partnerships Regulations 2001). Those for which a registration fee is charged are marked *.

Purpose	Form Number
Particulars of a mortgage or charge	LLP395*
Particulars for the registration of a charge to secure a series of debentures	LLP397*
Particulars of an issue of secured debentures in a series	LLP397a*
Certificate of registration in Scotland or Northern Ireland of a charge comprising property situated there	LLP398
Particulars of a charge subject to which property has been acquired	LLP400*
Declaration of satisfaction in full or in part of a mortgage or charge	LLP403a
Declaration that part of the property or undertaking charged: (a) has been released from the charge; (b) no longer forms part of the limited liability partnership’s property or undertaking	LLP403b
Notice of appointment of receiver or manager	LLP405(1)
Notice of ceasing to act as receiver or manager	LLP405(2)

How do I get it right first time?

Select the correct form to send to the correct registration office, and follow any notes on the form itself. Act as quickly as possible: you have only 21 days from the date of creation of the charge to register the correct details. Extensions of time to allow for postal delays apply only if a charge is created outside the UK over property outside the UK. In that case, the 21 days runs from the date when the instrument creating or evidencing the charge, or a copy of it, could have been received in the UK in the normal course of post, assuming it was despatched with due diligence.
Send the instrument creating or evidencing the charge with the form, if there is an instrument, as there usually will be. An instrument does not have to be sealed. Unsealed, it will be valid if two members of the limited liability partnership sign it. The instrument must be the original instrument, except in the following two cases when it can be a verified copy:(a) When a charge is created outside the UK over property outside the UK.
(b) When a charge covers property in Scotland or Northern Ireland, and the original instrument has been registered there.
Make sure the details on the form are correct and match the instrument. If Companies House find errors, the presenter must authorise their correction and, if necessary, deliver new forms within the 21-day time limit. If necessary, Companies House will return certificates, instruments and documents to the presenter named on the charge form itself. Please ensure this information is complete and accurate.
Make sure the limited liability partnership name and number are correct. Remember that a limited liability partnership name is only changed on the day the change-of-name certificate is issued by Companies House.
Make sure the creation date and description of the charge agree with the instrument.
Make sure the amount secured accurately reflects what is stated in the instrument.
Make sure the name of the chargee matches the instrument. (’Chargee’ means the person to whom property is charged.)
Make sure the short details of the property charged accurately reflect what is stated in the instrument.
For registered land it is desirable that you give the title number of the property. Ensure that charging clauses are always inserted, including reference to fixed and floating charges.
Sign and date the form.
Complete the forms legibly using black ink or, preferably, type the form. Forms are reproduced electronically so that the public can inspect them. The Registrar may refuse documents that are not suitable for scanning and reproduction.

Remember:
If you omit or mis-state any detail in the documents registered, then you should apply to the court to correct it under section 404 of the Act: Rectification of register of charges.

What happens when the application for registration reaches Companies House?

If the document is acceptable, Companies House take details from it to produce a certificate of registration and record an entry on the register of charges. Companies House return the certificate and instrument to the presenter, and scan and record the form, copy certificate and register entry.

What if Companies House has cause to query the application?

Companies House will contact the presenter with any queries. If the form needs to be corrected, it must be done within the 21-day time limit.

What if the charge is not registered in time?

If a registrable charge is not registered in time, then it is void against the liquidator or administrator and any creditor of the limited liability partnership.

If a limited liability partnership fails to deliver a registrable charge, and no interested party has registered it, then the limited liability partnership and every member of it who is in default are liable to a fine. If the default continues, they are liable to a daily default fine.

What must I do if my limited liability partnership acquires property that is already charged?

If the charge is of a type which the limited liability partnership would have had to register if it had created the charge itself, then it must notify the fact that it has acquired this property. To do this the limited liability partnership must complete and send Form LLP400 to Companies House, with a certified copy of any instrument that created or evidenced the charge.

This must be done within 21 days after the limited liability partnership completed the acquisition of the property. If the charged property is outside the UK and the charge was created outside the UK, the 21 days runs from the date when the copy instrument could have been received in the UK in the normal course of post, assuming that it had been despatched with due diligence.

Late delivery of the details on Form LLP400 is an offence. The limited liability partnership and every member of it who is in default are liable to a fine. If the default continues, they are liable to a daily default fine.

What rights has the chargee?

If the limited liability partnership does not send us a charge for registration, then the chargee (the person to whom property is charged) - or some other interested person - can register the required documents. In certain circumstances a chargee can appoint a receiver or manager, or ask the court to appoint a receiver or manager, over the property charged - for example, if the limited liability partnership defaults in payment of the debt secured by the charge. The chargee must notify the appointment to Companies House within 7 days using Form LLP405(1). Companies House will then enter this in the register of charges.

On ceasing to act, a receiver or manager must notify us using Form LLP405(2). Companies House will then enter the fact in the register of charges. See ‘Limited Liability Partnerships Winding-Up’ for more information on receivers and managers.

Satisfaction of mortgages and charges

1. What should I do when the charge is paid off (or ’satisfied’)?

The limited liability partnership need not inform Companies House that a charge has been fully or partly satisfied. However, it is obviously in the limited liability partnership’s own interests that potential investors and lenders know that all or part of the debt has been paid off. A member of the limited liability partnership may therefore make a statutory declaration on Form LLP403a before a Commissioner for Oaths or equivalent, and send it to us.

2. What if charged property ceases to be charged or to belong to the limited liability partnership?

As with partly or fully paid-off charges, the limited liability partnership need not inform Companies House that its property has been released from a charge or that the property no longer belongs to the limited liability partnership. However, it is obviously in the limited liability partnership’s interests that potential investors and lenders should know. A member of the limited liability partnership may therefore make a statutory declaration on Form LLP403b before a Commissioner for Oaths or equivalent, and send it to us.

3. Is there a fee for registering Forms LLP403a or LLP403b?

No.