_Trust Deeds._--When the amount borrowed by a company is large, the company commonly executes a trust deed by way of further security. The object of such a trust deed is twofold: (1) it conveys specific property to the trustees of the deed by way of legal mortgage (the charge contained in the debentures is only an equitable security), and it further charges all the remaining assets in favour of the debenture-holders, with appropriate provisions for enabling them, in certain events similar to those expressed in the debenture conditions, to enforce the security, and for that purpose to enter into possession and carry on the business, or to sell it and distribute the proceeds; (2) it organizes the debenture-holders and constitutes in the trustees of the deed a body of experienced business men who can watch over the interests of the debenture-holders and take steps for their protection if necessary. In particular it provides machinery for the calling of meetings of debenture-holders by the trustees, and empowers a majority of (say) two-thirds or three-fourths in number and value at such meeting to bind the rest to any compromise or arrangement with the company which such majorities may deem beneficial. This is found a very useful power, and may save recourse to a scheme or arrangement first sanctioned under the machinery of the Joint Stock Companies Arrangement Act 1870 (Companies Act 1908, § 120).
_Registration of Mortgages and Charges._--A company is bound, under the Companies Act 1862, to keep a register of mortgages and charges, but the register is only open for the inspection of persons who have actually become creditors of the company, not of persons who may be thinking of giving it credit, and the legislature recognizing its inadequacy provided in the Companies Act 1900 (§ 4 of act of 1908) for a public register at Somerset House of all mortgages and charges of certain specified classes by a company. If not registered within twenty-one days from their creation such mortgages and charges are made void--so far as they are securities--against the liquidator and any creditor of the company, but the debenture-holders retain the rights of unsecured creditors. An extension of the time for registering may be granted by the court, but it will only be without prejudice to the rights of third persons acquired before actual registration. These provisions for registration as amended are contained in the Companies Act 1908 (§ 93).