Companies Act 2014 section 412

Priority of charges

Section 412 establishes how the priority (i.e. ranking) of charges created by a company is determined, based on when the prescribed particulars are received by the Registrar rather than when the charge was created.

• Priority between competing charges is now determined by the date and time the Registrar receives the prescribed particulars of each charge, rather than by the date of creation of the charge
• Existing priorities arising because a person did not have notice of a matter are preserved, and creditors may also agree among themselves on a different priority ranking
• Certain information filed with the Registrar — such as negative pledge clauses, floating charge crystallisation events, and restrictions on use of charged assets — is treated as "extraneous material" that has no legal effect and need not be entered on the register
• An exception to the extraneous material rule applies to negative pledges contained in floating charges granted to the Central Bank for the purpose of providing or securing collateral

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