Register of Charges
A ‘charge’ is essentially a form of security a creditor uses to ensure they’ll be repaid the money they lend.
Think of it like this: companies often need to borrow money from banks or other lenders. To safeguard their funds, the lender may place a ‘charge’ on certain assets – these are the ‘charged assets.’ If everything goes as planned, the company will repay its loans without a hitch. But if it doesn’t, the lender has the right to sell off these charged assets to recover the money owed.
Charges generally come in two flavors:
- Fixed Charge: This ties up specific tangible assets like land, vehicles, ships, or even company shares.
- Floating Charge: This one is less precise and covers a range of assets which can eventually morph into a fixed charge. It can apply to anything with value, even if they’re intangible items like stock, book debts, or intellectual property.
Once a charge is agreed upon, the clock starts ticking for registration with the Accounting and Corporate Regulatory Authority (ACRA). If the whole process happened in Singapore, you’ve got thirty days to register. If the charge was set up outside of Singapore, however, you have a grace period of thirty-seven days.
Certain kinds of charges must be registered with ACRA; these include charges that support debentures, charges on uncalled share capital, land charges, and those associated with intellectual properties. To fully understand the types of charges that need to be officially filed, it’s best to check out Division 8 of the Company Act.
Importantly, these rules apply to every company that’s registered in Singapore, be they local or foreign firms.
Now, onto registering a charge. You have a couple of options:
- Go the do-it-yourself route and submit an online application to ACRA through Bizfile+ using your SingPass. This is usually on the plate of the company’s director or someone authorized and comes with a fee.
- Or, you can opt to hire a registered filing agent to do all the online filing work for you.
Whichever route you take, you’d get an email confirming the charge has been registered. It’s worth noting that a delay or failure to register can land you in hot water – it could result in a fine, or in some cases, make the charge invalid. So make sure to keep on top of your registration game!
