Registration of charges in the Republic of Singapore
The Accounting and Corporate Regulation Authority (ACRA) of the Republic of Singapore defines the Charge as "a form of security interest usually taken by a lender or creditor (“chargee”) to secure the repayment of a loan”.
Charges are divided into fixed and floating ones; fixed being the ones which are secured on fixed assets such as immovable property (i.e houses), intellectual property (i.e patents), movable property (i.e cars), and floating being the ones that are secured on non-specific charges (i.e potential dividends of a company).
Pursuant to Singaporean legislation, all companies registered at the Republic of Singapore, upon the creation of a charge and within 30 days of its creation, must register the same with ACRA. As with accordance to sections 131-141 of Division 8 of the Companies Act of Singapore Law there are certain types of Charges which must be obligatorily registered with ACRA. Such charges include amongst others debentures; uncalled share capital of a company; charges on ships and aircrafts; and land which may be situated in or outside Singapore.
The registration of charges is not optional; charges must be registered pursuant to the provisions of Singapore legislation. The failure of the submission constitutes an offense which may lead to conviction and also to the fining of the company of an amount up to SGD$1,000. Additionally, the failure to comply with the relevant provisions of the law renders the charge voidable against the liquidator or other creditors of a company.
Further to the above and under certain circumstances ACRA may grant, upon the request of the same, extension of time for the registration of a charge. Such circumstances include charges which were conducted outside Singapore or on which there might be errors and/or mistakes. For charges that have been created outside the Republic of Singapore, an extension may be granted only if the registration of the charge has not taken place within 37 days from the day of the creation of the charge. In case where a charge created outside the Republic of Singapore is not registered 37 days after its creation then a Court Order will be required for an extension. In case where an extension is obtained the company needs to register the charge within three months. On the contrary, extension is not allowed regarding charges which have been created within the Republic of Singapore. Notwithstanding, the company may obtain a court order for an extension and register the charge within the timeframe that the court order may grant in cases of charges created within the Republic of Singapore.
Further to the registration of charges, upon the repayment of a given debt, either partial or the entire, the company also needs to submit the relevant forms for the release of the charge. Such a submission serves for purposes of deregistration of the charge from ACRA’s records and the consequent release of the charge.
Having said the above, ACRA provides the opportunity for a charge to be registered online also with online payment options. Eltoma Corporate Services can provide such a service via BizFile which takes up to 4 working days for the registration to be filed with ACRA following the online submission. Eltoma Corporate Services provide both registration and deregistration services of charges for Singapore companies.
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