Procedure for Registration of Charges in Nigeria - Need for Urgent Reforms

Abstract

This paper examined the procedure for the registration of charges in Nigerian law. The list of registrable charges in section 197 Companies and Allied Matters act 2004 was examined, and the study revealed that the list is outdated and not adequate for modern financial practice. Modern debt finance practices including the use of receivables and other current forms of charges are not captured as registrable charge. The requirement of the law for companies to maintain a register of charges and debentures for the purpose of giving notice to investors of charges on the company assets is laudable, however the sanction in cases of default is negligible and ineffectual, and the fact that non registration by the company or late registration does not affect priority of the charges renders the whole provision useless and ineffectual. The 90 days period for registration without any other procedure for notice filing of executed charges has remained a great challenge to registration of charges in Nigeria. From a comparative viewpoint the paper concluded with suggestions for reforms.