Notice of an order to dispose of charged property

Notice of an Order to Dispose of Charged Property

A Notice of an Order to Dispose of Charged Property is a formal notification submitted to Companies House to document a court-approved order permitting the sale or disposal of assets subject to a charge during a company’s administration. This process is an essential part of insolvency proceedings, ensuring transparency and legal compliance.

What is Charged Property?

Charged property refers to assets used by a company as collateral to secure a loan or financial obligation. The charge gives the lender (secured creditor) a legal right to the asset in the event of default. During administration, these assets may need to be sold or otherwise disposed of to repay creditors and manage the company’s financial situation.

The Process

1. Administration and Appointment of an Insolvency Practitioner:
   When a company enters administration, an administrator is appointed to manage the company’s affairs and assets with the goal of maximising returns for creditors.

2. Court Approval for Disposal:
   If the administrator needs to sell or dispose of charged property, they must obtain permission from the court. The court assesses whether the disposal is necessary and in the best interests of creditors and stakeholders.

3. Notification to Companies House:
   Once the court grants the order, the administrator must notify Companies House. This notification updates the company’s public records, ensuring creditors, shareholders, and other stakeholders are informed of the administrator’s actions.

4. Details in the Notification:
   The notification typically includes:

   • The court order details.

   • Information about the charged property.

   • Any specific conditions or restrictions attached to the disposal.

5. Transparency and Compliance:
   The process ensures compliance with the Insolvency Act 1986 and helps maintain transparency in administration proceedings, reassuring all stakeholders.

Importance of the Notice

Submitting the notice ensures that:

• Creditors are informed of actions affecting their secured interests.

• The disposal of assets is legally documented.

• Companies House maintains accurate and up-to-date public records of the company’s administration process.

Useful Links for Further Reading

1. Companies House: Insolvency Guidance
   This page provides guidance on the responsibilities of insolvency practitioners and the requirements for notifying Companies House, making it essential for understanding compliance obligations.

2. The Insolvency Service: Administration Process
   Offers a detailed overview of the administration process, including the role of administrators and how charged property is managed, helping creditors and stakeholders navigate their rights.

3. Companies House: Filing Requirements for Insolvency Practitioners
   Explains the procedures for filing notifications and documents related to insolvency cases, including notices for disposing of charged property, providing clarity for insolvency practitioners.