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Registration of Charges and their Discharge

(I) Introduction

 
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To remove ambiguities and dispense with redundant items, the list of registrable charges under the new Companies Ordinance (“the new CO”) has been updated. The following changes have been made -

 
 

A charge on an aircraft or any share in an aircraft is specifically included (section 334(1)(h));

A charge on instalments due, but not paid, on the issue price of shares is added (section 334(1)(f));

A charge for the purpose of securing any issue of debentures (section 80(2)(a) of the old Companies Ordinance (Cap. 32) (“the old Ordinance”) is removed;

A shipowner’s lien on subfreights shall not be regarded as a charge on book debts or as a floating charge and is not registrable (section 334(4)); and

A charge on a company’s right to repayment of a deposit of money with another person is not registrable as a charge on book debts of the company (section 334(3)(b)).

 
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Under the new CO, a certified copy of the instrument creating or evidencing the charge as well as the specified form (containing the particulars of the charge) are required to be delivered to the Registrar of Companies (“the Registrar”) for registration and both will be placed on the public register for public inspection. Further, the time for registration of a charge is shortened from 5 weeks to one month.

 
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Under the new CO, a notification, in the specified form, of payment or satisfaction of debt or release from the charge must be accompanied by a certified copy of any instrument evidencing the discharge and both will be registered and available for public inspection.

 

(II) Relevant Provisions of the new CO

 
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Sections 333 to 347

 
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Part 8, Sections 62 to 75 of Schedule 11

 

(III) Transitional Arrangements

 
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For charges created before the commencement of the new CO, the provisions of the old Ordinance apply in respect of registration. However, if for any reason the requisite documents required under the old Ordinance are not delivered to the Registrar for registration within eight weeks after the commencement of the new CO, the new specified form and a certified copy of the instrument creating or evidencing the charge will be required to be registered by the new CO.

 
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There are no specific transitional provisions for the registration of debt satisfaction or release from a charge. The provisions of the old Ordinance apply to those applications for entries of satisfaction or release made before the commencement date of the new CO. Upon the commencement of the new CO, all applications for registration are subject to the provisions of the new CO.


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