22 Loan capital and charges 1 Debentures
1.1 "A written acknowledgment of a debt".
– Document which states the terms on which a company has borrowed money.
– They may be secured or unsecured.
2 Types of debenture
Single Debenture
2.1 (a) The word 'secured' after the bank overdraft in a company's balance sheet indicates a banker's (single) debenture.
(b) A banker's debenture is usually given to secure an overdraft up to a certain limit.
Issued as a series
2.2 Each transaction is a separate loan but the intention is that the lenders should rank equally.
Public
2.3 This is a debenture issued to the public (anyone).
2.4 Study note: make sure you can compare shares and debentures.
3 Types of security
Fixed charges
3.1 (a) This relates to a specific asset which may be realised by debenture holders to repay their loan.
(b) It provides excellent security for the lender (debenture holder) in that assets may not be traded or exchanged while there is a fixed charge on them.
(c) Any amount of loan not satisfied by selling the charged asset will rank as a unsecured creditor.
Floating charges
3.2 (a) This charge is secured on the company's assets generally. The assets may be traded freely.
(b) The charge crystallises ie attaches to specific assets when:
(i) There is a breach of the debenture trust deed; or
(ii) A receiver is appointed; or
(iii) A company commences Winding up.
Priority of charges
3.3 (a) If there are different charges over the same property, it will be necessary to ascertain their ranking.
(b) (i) Similar charges rank in order of creation.
(ii) Floating charges rank behind fixed charges even if those charges are created later.
(c) Floating charges rank behind preferential creditors.
Negative pledge charge
3.4 (a) This clause can be included in the terms of the floating charge
(b) Effect: subsequent fixed charges will rank behind the floating charge if they have actual notice of the NPC.
Advantages/disadvantages
3.5 Study note: make sure you understand the advantages and disadvantages of the two types of charge.
Registration of charges
3.6 (a) (i) Particulars of all charges must be registered with the Registrar of Companies within 21 days (s.398)
(ii) Failure to register renders the charge void against the liquidator and any person who acquires an interest in property subject to the charge (s.399).
(iii) The loan remains valid but unsecured.
(b) Under s.399 a debenture holder can register the charge if it appears the company is unlikely to do so.
Factors affecting a charge's validity
3.7 Correctly registered charges can be rendered invalid in a number of circumstances.
3.8 (a) The court has the power to render preferences void.
(b) A preference is any transaction that is intended to improve a creditor's position on a winding up.
(c) The preference must have been given within six months of liquidation (2 years if in favour of a connected person).
3.9 Floating charges will be rendered invalid if
(a) the company was insolvent when the charge was created, and
(b) no consideration was given in exchange for the charge.
If new consideration was given, the charge will be valid to the extent of that consideration.
Company register考试用书
3.10 (a) Every company must keep a register of debentures and charges
(b) This may be inspected by members and creditors free of charge, and others on payment of a reasonable fee (s.407).
(c) Failure to record the charge in this register does not invalidate it.
(d) For knowing or wilful default in entering the charges in the register, the officer at fault is liable to a fine. |
发表于 2012-2-23 17:09:42
