It is coming up to completion day on a banking transaction.
All the finance documents are in agreed form, signatories are lined up, and completion arrangements have been finalised.
But have you considered that if your transaction involves Scottish companies or Scots law documents that there are Scots law differences to the completion process as compared to completions entirely under the laws of England and Wales – or indeed other jurisdictions?
Scots law and practices are aligned with English law and practices on a lot of things, but there are some key differences.
Below are the top 5 things that you should bear in mind if there is a Scottish angle to your completion.
1. Signing instructions – there are specific Scottish requirements for the signing of documents. You should check with a Scottish lawyer before issuing signing instructions or signing documents. For a brief overview of the differences between signing security documents under Scots law and English law see this recent blog by my colleague.
2. Timing- linked to number one above, there may be a requirement for certain Scots law documents to be signed in wet ink and to be in a particular physical location at completion. There may also be a requirement to obtain searches, or to lodge an advance notice in the Land Register of Scotland. These things can necessitate a reasonable amount of notice of the completion date to arrange.
3. Perfection requirements- there are different perfection requirements for security in Scotland. For example, for a share pledge to be perfected the shares need to physically transfer into the name of the security holder or its nominee. And for an assignation of contracts to be perfected, an intimation must be delivered to the relevant third parties. Without these steps, there is no perfection of security. There is no Scottish equivalent to equitable security.
4. Security registrations- as is the case for security granted by English companies, security granted by Scottish companies must be registered at Companies House. However, unlike in England, security in relation to land granted by Scottish companies must be registered first in the Land Register of Scotland before registration can occur at Companies House (as opposed to registration at Companies House and then the Land Register as is the case for English companies).
5. Registration of ranking agreements- any instrument of alteration affecting the ranking of a floating charge granted by a Scottish company must be registered at Companies House against the instrument creating the floating charge. If there are commercial sensitivities around the terms of detailed ranking agreements or intercreditor agreements on your transaction, you may wish to think about creating an additional short form ranking agreement only dealing with ranking of floating charges granted by a Scottish company.
Keeping these top 5 things in mind as you progress through a transaction is very worthwhile as doing so will help avoid any last minute difficulties around completion.
If you would like to discuss anything raised in this blog please feel free to call or email me.