Foreign companies and the Registers

While it remains relatively uncommon for the Keeper to encounter applications for registration in the Land Register involving a business entity from outwith the United Kingdom, increasingly foreign businesses are entering the Scottish property market, whether to acquire, or to provide loans to be secured over, heritable property. Pre-Registration Enquiries has addressed questions from agents concerning companies constituted in foreign states such as Liberia, Cyprus, Sweden, Panama, Faroe, Canada, Liechtenstein, Jersey, the British Virgin Islands and the Bahamas.

Despite the variety of foreign companies to which these enquiries relate, there are typically two matters of concern to agents: first, ensuring the proper execution of the deed inducing registration granted by the foreign company; and, secondly, what evidence, if any, the Keeper will require of the current status and capacity of a foreign company, which is one of the parties to a property transaction.

Execution of deeds by foreign companies

The accepted position under international private law is that deeds related to immovable property must be executed according to the law of Scotland (and not the place of execution or the place in which the company or corporate body is incorporated). Following from this, the Keeper’s policy is that a disposition or standard security granted by a foreign corporate body must conform to the requirements for self-proving status in terms of para 5 of Schedule 4 to the Require-ments of Writing (Scotland) Act 1995. The parties may choose that the deed additionally meets the requirements of the local law of the company or the place of execution.

Where the deed is executed by an authorised signatory, as opposed to being ex facie signed by a member of the corporate body’s management board or the secretary, the applicant should enclose evidence of the authorisation and, if the authorisation is in a foreign language, a translation should accompany the evidence and be certified as correct by the translator. The Keeper is aware of academic comment to the effect that, where an agent encounters practical difficulties in ensuring that the signatory or signatories are a member of the governing board or the secretary, a letter of comfort from a law firm in the appropriate jurisdiction could be sought to confirm the position.

Status and capacity of the foreign company

Each of the statutory application forms for registration contains a question intended specifically to elicit information about corporate bodies other than those which are registered under the Companies Acts. For example, question 7 on the Form 1 application for first registration reads:

Is any party to the deed inducing registration a corporate body other than a company registered under the Companies Acts?

If YES, is it acting intra vires?

If NO, please give details

Has any arrangement been put in hand for the dissolution of any such corporate body?

If YES, please give details

Other questions on the application forms will also be relevant to foreign bodies corporate, including the question:

Are there any facts and circumstances material to the right or title of the applicant which have not already been disclosed in this application or its accompanying documents?

If YES, please give details

Applicants should note that the questions on the application forms concerning companies registered under the Companies Acts do include those foreign companies which are registered as overseas companies and re-registered under the Companies Acts.

As with all types of registration application, the Keeper relies upon the answers given in the statutory application forms; it is therefore expected that parties will have investigated and satisfied themselves as to the status of a foreign corporate body, the names of the relevant officers or directors of the body, and that it is not under any process equivalent to dissolution or relating to insolvency. If the answers given in an application involving a foreign company raise concerns that are not alleviated by additional evidence sought by requisition, the application will either be rejected outright or completed subject to an appropriate exclusion of indemnity.

The manner in which such investigations should be conducted is not one upon which the Keeper ought properly to express a view, but it may be helpful to point out that private searching companies may carry out searches relating to foreign companies either directly or through a searcher in the local jurisdiction, where such a service exists. Conveyancing textbooks also suggest that a formal letter from a law firm in the country concerned could be obtained to certify, inter alia, that the company is duly incorporated and is not in the process of being dissolved etc, which would hopefully allow the parties satisfactorily to complete the relevant questions on the application forms.

email bruce.beveridge@ros.gov.uk

ARTL UPDATE – as at 23 October

10,383 ARTL transactions have taken place.

• 70 solicitors’ firms and 15 lenders are currently on the ARTL system.
• 4 local authorities are using the system.
• 24 full sign up meetings scheduled for the next four weeks.
• For up-to-date information and a full list of participating firms and companies go to: ros.gov.uk/artl