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Q1.

Are there any major changes in the list of registrable charges under the Companies Ordinance (Cap. 622) after 3 March 2014?

 
Q2.

Is a charge on deposits of a company registrable as a charge on book debts under the Companies Ordinance (Cap. 622)?

 
Q3.

What documents are required to be delivered to the Registrar of Companies for registration of a charge under the Companies Ordinance (Cap. 622)?

   
Q4.

Can I deliver the original charge instrument together with the Form NM1 for registration of a charge ?

   
Q5.

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

   
Q6.

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

 
Q7.

Will the deadline for the delivery of a charge to the Companies Registry for registration 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?

 
Q8.

Will a presentor receive a Certificate of Registration of Charge together with the certified copy of charge instrument duly endorsed from the Companies Registry after registration of the charge?

 
Q9.

What will happen to the certified copy of the charge instrument delivered together with the specified form after registration?

 
Q10.

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?

 
Q11.

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

 
Q12.

Do I need to deliver the evidence of discharge together with the Form NM2?

 
Q13.

If a Form NM2 (Notification of Payment / Satisfaction of Debt, Release from Charge, etc.) is signed by the chargee or mortgagee, is it necessary to deliver a certified copy of evidence of discharge for registration?

 
Q14.

How should a copy of instrument creating or evidencing the charge or evidencing the payment, satisfaction, release or discharge of charge be certified?

   
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Q1.

Are there any major changes in the list of registrable charges under the Companies Ordinance (Cap. 622) after 3 March 2014?

 
Answer:

There are the following major changes to the list of registrable charges -

 
    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 Predecessor Ordinance (i.e. the Companies Ordinance (Cap. 32) as in force from time to time before the commencement date of the Companies Ordinance (Cap. 622))) is removed.
 
 

Further, it is clarified that if a company charters a ship from a shipowner, the shipowner's lien on the subfreights for amounts due under the charter is not to be regarded as a charge on the book debts of the company or as a floating charge on the company’s undertaking or property and is not registrable as such (section 334(4)).

 
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Q2.

Is a charge on deposits of a company registrable as a charge on book debts under the Companies Ordinance (Cap. 622)?

 
Answer:

No. Section 334(3)(b) of the Companies Ordinance (Cap. 622) specifically states that if a company maintains a deposit of money with another person (whether the money is deposited by the company or by any other person for the company’s benefit), a charge on the company’s right to repayment is not to be regarded as a charge on book debts.

 
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Q3.

What documents are required to be delivered to the Registrar of Companies for registration of a charge under the Companies Ordinance (Cap. 622)?

 
Answer:

Under the provisions of the Companies Ordinance (Cap. 622), a certified copy of the instrument creating or evidencing the charge is required to be delivered to the Registrar of Companies for registration (sections 335, 336 and 338 to 340) together with the specified form - Statement of Particulars of Charge (Form NM1).

 
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Q4.

Can I deliver the original charge instrument together with the Form NM1 for registration of a charge ?

 
Answer:

No, the original charge instrument should not be delivered for registration. If it is erroneously delivered, the Registrar of Companies will not be responsible for any damage to the original document that may result from the document scanning process or for the safe return of the original charge instrument to the presentor.

 
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Q5.

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

 
Answer:

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

 
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Q6.

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

 
Answer:

Yes. The time limit within which the certified copy of charge instrument and Form NM1 must be delivered for registration is one month after the date of creation or, where the charge is created outside Hong Kong comprising property situated outside Hong Kong, one month after the date on which a certified copy of the said instrument could, if despatched with due diligence, have been received in Hong Kong in due course of post.

 
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Q7.

Will the deadline for the delivery of a charge to the Companies Registry for registration 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?

 
Answer:

The Registrar of Companies (the Registrar) has no power to grant extension of time for late delivery of a charge under 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 346 of the Companies Ordinance will be required.

 
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Q8.

Will a presentor receive a Certificate of Registration of Charge together with the certified copy of charge instrument duly endorsed from the Companies Registry after registration of the charge?

 
Answer:

No. Only the Certificate of Registration of Charge will be issued after registration of the charge. There will be no endorsement on the certified copy of charge instrument and the certified copy will not be returned to presentors.

 
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Q9.

What will happen to the certified copy of the charge instrument delivered together with the specified form after registration?

 
Answer:

Image records of the certified copy of the charge instrument together with the specified form will be available for public inspection in the Companies Register. The availability of a certified copy of the charge instrument will give rise to constructive notice of all the terms in the charge instrument, including negative pledge clauses, to those who may reasonably be expected to search the register, such as banks, financiers and relevant professionals.

 
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Q10.

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?

 
Answer:

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.

 
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Q11.

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

 
Answer:

The registration of a charge cannot be cancelled. However, the company or the mortgagee or person entitled to the charge, may notify the Registrar of Companies of the payment, satisfaction, release or cessation in specified form “Notification of Payment╱Satisfaction of Debt, Release from Charge, etc.,” (Form NM2), to be accompanied by a certified copy of any instrument for the purpose of evidencing the payment, satisfaction, release or cessation.


There is no statutory time limit for the delivery of a Form NM2. The company or the chargee or mortgagee can deliver a Form NM2 any time after the charge has been discharged.

 
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Q12.

Do I need to deliver the evidence of discharge together with the Form NM2?

 
Answer:

Yes. A certified copy of any instrument for the purpose of evidencing the payment, satisfaction, release or cessation must accompany the Form NM2 delivered to the Registrar for registration (Please also see Q14 below).

 
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Q13.

If a Form NM2 (Notification of Payment / Satisfaction of Debt, Release from Charge, etc.) is signed by the chargee or mortgagee, is it necessary to deliver a certified copy of evidence of discharge for registration?

 
Answer:

Yes. Form NM2 must be delivered with a certified copy of evidence of discharge for registration even if it is signed by the chargee or mortgagee (Please also see Q14 below).

 
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Q14.

How should a copy of instrument creating or evidencing the charge or evidencing the payment, satisfaction, release or discharge of charge be certified?

 
Answer:

For registration of a charge, section 333(4) of the Companies Ordinance (Cap. 622) (“CO”) provides that a copy of an instrument in relation to a charge delivered for registration is a certified copy if it is certified as a true copy by –


 

(a) 

a director or company secretary of the company delivering the copy for registration; or a person authorized by that company for that purpose; or

(b) 

 

(i) 

any other person interested in the charge; or

(ii) 

in the case of –

 

(A) 

an interested person who is a natural person, a person authorized by the interested person for the purpose; or

(B) 

an interested person that is a body corporate, a person authorized by the interested person for the purpose, or a director or company secretary of the interested person.


For registration of a discharge, section 345(5) of the CO provides that a copy of an instrument evidencing the payment, satisfaction, release or cessation of a registered charge is a certified copy if it is certified as a true copy by –


 

(a) 

the mortgagee or the person entitled to the charge; or

(b) 

in the case of –

 

 

(i) 

a mortgagee or entitled person who is a natural person, a person authorized by the mortgagee or entitled person for the purpose; or

(ii) 

a mortgagee or entitled person that is a body corporate –

 

(A) 

a person authorized by the mortgagee or entitled person for the purpose; or

(B) 

a director or company secretary of the mortgagee or entitled person.


Please note that the certification must contain the name and capacity of the person making the certification and the date on which the certification is made. If the certification is made on behalf of the chargor (company) / mortgagee, this fact must be stated so as to show that the requirement under section 333(4) or 345(5) (as the case may be) has been satisfied.

 
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