We maintain a register of charges over the assets of Bermuda entities. Registering a charge is not what makes it valid. It is what fixes its priority.
The register of charges
| Companies | Companies Act 1981 Part V, s.55 |
| Limited liability companies | Limited Liability Company Act 2016 s.222 |
| Partnerships with legal personality | Partnership Act 1902 ss.4F to 4L |
A charge is registered by application to us, and the same Parts provide for amendment of the register, correction, series of debentures, particulars of commission paid, and entry of satisfaction or release of property from a charge.
Priority
Priority runs from the date of registration, not the date of creation
A registered charge ranks ahead of charges registered later, and ahead of charges that are not registered at all. A charge created first but registered second loses.
Registration is not mandatory, and an unregistered charge is still valid between the parties. What it is not is protected against a later registrant. There is no statutory deadline for registering, which is another way of saying there is no reason to wait.
Partnerships with legal personality
The partnership register of charges applies only to a partnership that has elected legal personality under section 4A of the Partnership Act 1902. A partnership without the election has no separate assets to charge, because partnership property is held by the partners.
Priority for charges registered under the partnership regime runs from the date of registration rather than the date of creation.
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What is public
Information on charges is returned by a search of the register, for companies, LLCs and partnerships that have elected legal personality.
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