Keeping the Hong Kong Register of Charges and Filing Requirements

Hong Kong Register of Charges Filing Requirements

A Hong Kong company creating a mortgage, debenture, or other charge over its assets has two obligations under the Companies Ordinance (Cap. 622). Register the charge with the Companies Registry within the statutory period. Maintain an internal register of charges at its registered office or a prescribed place. Miss either and the charge is void against a liquidator or creditor. The company and its officers also face penalties.

Register of Charges Hong Kong Cap 622

Part 8 of the Companies Ordinance (Cap. 622) sets out the framework. Section 334 requires every company to keep a register of charges at its registered office or another place in Hong Kong notified to the Registrar (a prescribed place). The register must contain:

• A short description of the property charged
• The amount of the charge
• The name of the person entitled to the charge, unless it is a bearer security

This is one of five statutory registers a Hong Kong company must maintain. The others are the register of members, register of directors, register of company secretaries, and the significant controllers register. The company secretary is responsible for keeping the register accurate and up to date.

Hong Kong Company Charge Registration

Registration with the Companies Registry is separate from the internal register. When a company creates a charge, it delivers prescribed particulars to the Registrar within the statutory period. The Registrar enters the charge into the public register, giving notice to other creditors and protecting the charge-holder's priority.

A charge not registered within the required time is void against a liquidator or any creditor of the company. The charge-holder loses their security interest and becomes an unsecured creditor. The money secured by the charge becomes immediately payable, even if the charge document says otherwise.

The types of charges that must be registered include:

• A charge on land or any interest in land
• A charge on book debts of the company
• A charge on goodwill, patents, trademarks, or copyright
• A charge on a ship or aircraft
• A floating charge on the company's undertaking or property
• A charge on calls made but not paid
• A charge on a ship's freight
• A charge on a ship's cargo
• A charge on a ship's passage money
• A charge on a ship's insurance
• A charge on a ship's documents

Form NM1 Hong Kong Charge Particulars

The prescribed form is Form NM1, titled "Statement of particulars of charge." The form must be signed by the company and the charge-holder, or by a person authorised by either of them. Form NM1 requires:

• The company name and company number
• The date of creation of the charge
• A short description of the property charged
• The amount secured by the charge
• The name and address of the charge-holder
• Whether the charge is a floating charge and, if so, any property subject to a negative pledge

Deliver the form to the Companies Registry with the instrument creating the charge, if the charge is created by an instrument. If the charge is created orally, the form alone suffices.

The Companies Registry issues a certificate of registration once the charge is recorded. This certificate is conclusive evidence that the registration requirements have been met.

Hong Kong Charge Filing Deadline

The deadline is strict. The company must deliver Form NM1 to the Companies Registry within one month of the charge's creation. The one-month period runs from the date the charge is created, not from the date the charge document is executed.

If the charge is created outside Hong Kong and is created by an instrument, the period extends to one month from the date the instrument would have been received in Hong Kong in the ordinary course of post. For charges created orally outside Hong Kong, the period is one month from the date the charge is created.

If the company fails to file within the one-month period, the court may grant an extension of time on such terms as it thinks fit. The court will require the company to explain the delay and may impose conditions, such as requiring the company to indemnify any person who suffers loss because of the late registration.

Form NR2 and the Prescribed Place

If the company keeps its register of charges at a place other than its registered office, notify the Registrar using Form NR2. This form is also used for the other statutory registers. The prescribed place must be in Hong Kong. It must be a location where the register is available for inspection.

File Form NR2 within 14 days of moving the register to a new location. If the company moves the register back to its registered office, file Form NR2 again to update the record.

The register of charges must be open to inspection by any creditor or member of the company without charge. Other persons may inspect the register on payment of a prescribed fee.

Consequences of Non-Compliance

Failure to register a charge with the Companies Registry within the one-month period renders the charge void against a liquidator or creditor. The charge-holder loses their security. The company and every officer who knowingly and wilfully authorised or permitted the default may also be liable to a fine.

Failure to maintain the internal register of charges is also an offence. The company and every officer in default are liable to a fine. The court may also order the company to rectify the register.

Interaction with Other Statutory Registers

The register of charges is one of five. The others are the register of members, register of directors, register of company secretaries, and the significant controllers register. All five registers must be kept at the registered office or a prescribed place, and the company must notify the Registrar of the location using Form NR2.

The company secretary is responsible for ensuring that all statutory registers are properly maintained and that filings with the Companies Registry are made on time. The annual return (Form NAR1) requires the company to confirm that its statutory registers are kept at the registered office or a prescribed place.

Practical Steps for Compliance

To comply with the Hong Kong register of charges filing requirements, a company should:

1. Identify any charge created over its assets, including mortgages, debentures, and floating charges
2. Prepare Form NM1 with the statement of particulars of charge
3. Deliver Form NM1 to the Companies Registry within one month of the charge's creation
4. Enter the charge in the company's internal register of charges
5. Keep the register at the registered office or notify the Registrar using Form NR2 if kept elsewhere
6. Ensure the register is available for inspection by creditors and members

The company secretary should maintain a diary of charge creation dates and filing deadlines. If the company uses a licensed TCSP provider for company secretarial services, that provider will handle the charge registration process as part of its service.

Charges Created by an Existing Company

When a company that is already registered creates a new charge, the same filing requirements apply. File Form NM1 within one month of the charge's creation. Update the internal register of charges.

If the company acquires property that is already subject to a charge, register that charge within one month of the acquisition. Enter the charge in the internal register.

Charges Created Before Incorporation

A charge created by a person before the company is incorporated may be registered after incorporation. Deliver Form NM1 to the Companies Registry within one month of the charge being created, or within one month of the company's incorporation, whichever is later. The charge will be treated as if it were created on the date of incorporation.