Lending to a Company Incorporated in Ireland: Key Corporate and Asset Register Searches

A Practice Note discussing the key searches to be carried out for a loan agreement, guarantee or security document which is subject to English law or the law of a US state where a borrower, guarantor or security provider is incorporated in Ireland.

This Note is intended to be used to facilitate the signing and closing of a loan financing where a borrower, guarantor, or security provider (each, an obligor) is incorporated in Ireland. While the issues to be considered in relation to an obligor when signing and closing a loan agreement, guarantee, or security document will be broadly similar regardless of an obligor’s jurisdiction of incorporation, there will typically be jurisdiction-specific issues that will need to be considered.

It is important to identify any signing and closing issues, specific practices, or concerns early in a loan finance transaction that involves an obligor incorporated in a jurisdiction other than the governing law of the loan financing documentation. This will then make it easier to ensure that these issues, practices, and concerns do not have a negative impact on the transaction timeline or lead to unnecessary transaction costs. Transaction-specific advice from lawyers in the appropriate jurisdiction should be taken in due course to ensure a transaction closes without any unforeseen issues.

This Note looks at the key searches to be carried out for a corporate loan made under a loan agreement which is subject to English law or the law of a US state to an obligor incorporated in Ireland. It covers the following:

• Searches at public registries.
• Searches of asset registers.

This Note assumes the following:

• The obligor is a company incorporated in Ireland.
• The loan agreement is subject to English law or the law of a US state.

This Note is part of a suite of maintained resources that explain regulatory issues that should be considered when undertaking a cross-border loan finance transaction in a specified jurisdiction where the lender is incorporated in a different jurisdiction. For more information on considerations relating to signing and closing this type of transaction, see Cross-Border Lending: Signing and Closing a Corporate Loan Transaction Toolkit. For information on regulatory issues, see Cross-Border Lending: Regulatory Issues Toolkit. For information on considerations relating to structuring this kind of transaction, see Cross-Border Lending: Structuring the Transaction Toolkit. For information on legal and documentary issues, see Cross-Border Lending: Legal and Documentation Issues Toolkit.

Searches at Public Registries

In the context of a secured corporate loan financing, a lender’s solicitor will carry out the following checks:

• A search at the Irish Companies Registration Office (CRO) to ensure:
  • the obligor has not been struck off;
  • the obligor is not subject to a winding up order or examinership (court-supervised restructuring) order;
  • no receiver has been appointed to some or all of the obligor’s assets; and
  • no prior charges have been registered and not discharged.
• A search in the High Court to check for any unsatisfied judgments or winding-up or insolvency petitions of an Irish obligor.

The time needed to procure the above search results can vary depending on the law search company involved and may take longer at peak times. Best practice is to order the searches the day before they will be required, and refresh them on the closing date.

In the case of real estate financing transactions, the following additional searches should be requested:

• A search at the Sheriff’s office (to include a Receiver of Fines search) against the relevant property and any obligors.
• A search in the Land Registry for registered property or the Registry of Deeds for unregistered property.

Planning searches against the property at the relevant local authority, CRO searches, and some property and High Court searches, can be carried out online. However, some searches require physical attendance at the relevant registry office, such as planning searches in certain areas.

For liability reasons, it is market practice to outsource these searches to professional search companies who charge a fee for this service. The cost of engaging a professional searcher varies depending on the number of companies and the registers to be searched against.

There is no system in Ireland for preserving priority of a security interest merely by checking a register.

It is possible for a mortgagee to register a priority entry in the Land Registry in relation to a registered property over which security will be taken. If the priority entry is successfully registered, a mortgagee will have a period of 44 days (after the registration date of the priority entry) to apply to register the instrument of charge in question. Any application for registration made by a third party after the registration date of the priority entry, and before the mortgagee applies to register the instrument, will therefore rank after the mortgagee’s application.

Although it is possible for a company to register a person who has standing authority to bind it with the CRO, this is seldom done. Instead, it is assumed that a director has ostensible authority to bind a company, and a CRO search should indicate an obligor’s current directors (although the register may not be up to date).