Registering Security Granted by Exempted Companies and Partnerships in Bermuda

With defaults and insolvencies on the rise due to difficult trading conditions caused by, amongst other things, the global pandemic, lenders and secured parties (a “Secured Party”) should ensure the security they hold over interests in exempted companies and partnerships incorporated or registered in Bermuda, and/or their assets, has been registered in Bermuda to ensure the priority such security is supposed to have. Registration of such security interests ensures that the Secured Party has priority over (1) any subsequently registered interests and (2) any interests that are registrable but have not been registered.

Bermuda Security Interest Registration Process

Exempted Companies

The Bermuda Registrar of Companies maintains a publicly searchable register of charges whereby a charge over the assets of a Bermuda exempted company can be registered. Under the Bermuda Companies Act 1981 (the “Companies Act”) a charge includes any interest created in property by way of security, including any mortgage, assignment, pledge, lien or hypothecation.

Registration of a charge with the Registrar is not necessary for such charge to be valid, but doing so will seek to establish its priority over any unregistered charges and any subsequently registered charges to the extent Bermuda law governs the priority of such charge. While there is no statutory time limit in which a filing with the Registrar must be made, it is recommended that any filing be made as soon as possible, as priority is determined by the date that the charge is registered and not on the date of its creation. However, registration only establishes priority amongst other registrable interests; it will not provide priority over any interest that cannot be registered.

 

To continue reading full articles in PDF format:
Registering Security Granted by Exempted Companies and Partnerships in Bermuda

 

---

---

---