Can the chargee or mortgagee of a charge submit the charge for registration?

If a company has created a charge, is there any time limit for submitting the charge for registration?

If a subsidiary company creates a charge over its own property to secure financial facilities or loans for its parent company, which company is the chargor of the charge?

Can the registration of a charge be cancelled after it has been discharged?

Do I need to submit the evidence of discharge together with the Form M2?

What are the major changes brought about by the implementation of the provisions in Schedule 2 to the Companies (Amendment) Ordinance 2004 on the registration of charges for non-HK companies?

Following the implementation of the new section 91 of the Companies Ordinance with effect from 14 December 2007, will the Companies Registry continue acknowledging receipt of the delivery of charges created by non-HK companies which have not been registered under Part XI of the Companies Ordinance?

Can the chargee or mortgagee of a charge submit the charge for registration?

Yes. Both the company and the chargee or mortgagee can submit the charge for registration.

If a company has created a charge, is there any time limit for submitting the charge for registration?

Yes. The instrument creating the charge should be delivered to the Companies Registry for registration together with a duly completed Form M1 within 5 weeks after its creation. If the charge was created outside Hong Kong and comprises property outside Hong Kong, the instrument (or a certified correct copy of the instrument) should be dispatched with due diligence to Hong Kong and it should be delivered with the Form M1 to the Companies Registry for registration within 5 weeks after the instrument (or its certified correct copy) has been received in Hong Kong.

Will the deadline for the delivery of a charge to the Companies Registry for registration under Part III of the Companies Ordinance be extended to the following Monday if the last date for delivery falls on a Saturday, just the same treatment of deadline which falls on a public holiday?

The Registrar of Companies (the Registrar) has no power to grant any extension of time for late delivery of a charge under Part III of the Companies Ordinance. If the due date for delivery of a charge for registration falls on a Saturday, companies or presentors will have to make suitable arrangements to deliver the charge to the Registrar for registration by the preceding Friday. If it is delivered to the Registrar on the following Monday beyond the prescribed time period, a court order extending the time for registration of the charge under section 86 of the Companies Ordinance will be required.

If a subsidiary company creates a charge over its own property to secure financial facilities or loans for its parent company, which company is the chargor of the charge?

Although the parent company is the shareholder of the subsidiary company, they are separate corporate entities. As the subsidiary company is the owner of the charged property, the subsidiary company is the chargor of the charge.

Can the registration of a charge be cancelled after it has been discharged?

The registration of a charge cannot be cancelled. However, the Registrar of Companies may, on application made by either the company, or the chargee or mortgagee of the charge in the specified form "Memorandum of Satisfaction or Release of Property from Charge" (Form M2), together with such documentary evidence as may be required, enter on the Register of Charges a memorandum under section 85 of the Companies Ordinance.

There is no statutory time limit for submitting a Form M2. The company or the chargee or mortgagee can submit a Form M2 any time after the charge has been discharged.

Do I need to submit the evidence of discharge together with the Form M2?

If the specified Form M2 is signed by the company, it must be accompanied by documentary evidence of the discharge. If the Form M2 is signed by the chargee or mortgagee, no evidence is required. If applicable, documentary evidence of change of chargee or mortgagee should be provided. Please refer to the Notes for Completion of the Form M2 for details.

What are the major changes brought about by the implementation of the provisions in Schedule 2 to the Companies (Amendment) Ordinance 2004 on the registration of charges for non-HK companies?

The new section 91 of the Companies Ordinance clarifies the circumstances under which a non-Hong Kong company is required to register charges on its property. While sections 91(1) and (3) extend the application of Part III of the Companies Ordinance on registration of charges to a non-Hong Kong company registered under Part XI, section 91(2) further clarifies that Part III does not extend to charges on property in Hong Kong of a non-Hong Kong company registered under Part XI if the relevant property was not in Hong Kong at the time the charge was created by the company or at the time it was acquired by the company subsequent to the creation of the charge.

In addition, the new section 91(7) clarifies specifically how a ship or aircraft shall be treated as property in Hong Kong for the purpose of Part III of the Companies Ordinance.

Following the implementation of the new section 91 of the Companies Ordinance with effect from 14 December 2007, will the Companies Registry continue acknowledging receipt of the delivery of charges created by non-HK companies which have not been registered under Part XI of the Companies Ordinance?

No. The Companies Registry will no longer accept the delivery of charges created by non-HK companies which have not been registered under Part XI of the Companies Ordinance. Forms M1 which have not stated the company registration number will be summarily rejected by the Companies Registry's staff over the counter without any acknowledgement.