Specific assets and real control
A fixed charge normally attaches to an identified asset or category of assets and materially restricts the company's ability to dispose of it or its proceeds without the charge holder's consent.
Company security · England and Wales
Fixed and floating charges explained
A debenture may give a lender security over particular assets, changing classes of assets, or both. The document, the company's freedom to deal with the assets and any insolvency process matter more than the label alone.
Security is not ownership
A registered charge does not, by itself, mean the lender owns every asset described.
The instrument matters
Asset descriptions, control and contractual restrictions must be checked.
Insolvency can stop action
Administration, liquidation or a moratorium may change what enforcement is permitted.
Start with the document
What is a debenture?
“Debenture” is commonly used for a security document under which a company grants one or more charges to a lender. A single debenture may contain fixed charges over identified assets and a floating charge over all or part of the company's undertaking and assets.
The Companies House register is an important starting point, but the filed particulars and charge instrument must be read together. Registration does not decide whether a charge is fixed or floating, prove that an asset belongs to the lender, or resolve a priority dispute.
The distinction
Fixed charge, floating charge and ownership
The legal effect depends on the substance of the arrangement and the control exercised over the assets.
A changing class of assets
A floating charge may cover stock, receivables or another circulating class while allowing the company to deal with those assets in the ordinary course of business until the charge crystallises or enforcement rights arise.
A separate question
Hire purchase, leasing, retention of title and genuine third-party ownership are not the same as a company charge. Evidence of title must be assessed separately.
Crystallisation
A floating charge does not simply become ownership
The old page treated default or insolvency as automatically giving the lender possession and a right to seize assets. That is not a safe statement.
How crystallisation may occur
The instrument may provide for automatic crystallisation or permit it following a specified event or notice. An insolvency appointment or cessation of business may also affect the charge. The wording and facts must be checked.
What crystallisation changes
Crystallisation generally changes the operation of the security over the relevant assets. It does not, without more, transfer ownership to the lender or establish that the lender has taken possession.
Receiver or administrator appointed
The powers of an appointed office-holder, the statutory moratorium and any consent or court-permission requirements take priority over assumptions drawn from the register.
Disputes require legal resolution
An enforcement agent does not determine contested security, ownership or priority. Where documents conflict or a claim is disputed, the creditor should obtain specialist legal advice before action continues.
Taking control of goods
How a company charge affects enforcement
Under Schedule 12 to the Tribunals, Courts and Enforcement Act 2007, an enforcement agent may take control only of goods of the debtor. A charge is a security interest; it does not automatically mean the charged goods cease to be the debtor's goods.
| Finding | What it may mean | Required response |
|---|---|---|
| Floating charge only | The company may still own and use the goods. The charge alone is not a universal exemption from taking control. | Read the instrument and check crystallisation, appointments, insolvency restrictions and competing claims. |
| Fixed charge over identified asset | The lender may have strong proprietary security and restrictions over disposal. | Do not assume the asset is freely realisable; refer the documents and any objection for legal review. |
| Third-party title claim | The asset may not be the debtor's goods at all. | Request invoices, finance agreements, title evidence and any relevant statutory claim documentation. |
| Administration or moratorium | Enforcement or steps against company property may be prohibited without consent or court permission. | Pause and establish the procedure, commencement date, office-holder and necessary authority. |
| Liquidation or winding-up petition | Statutory restrictions, priority rules and the treatment of completed or incomplete execution may apply. | Escalate immediately and obtain insolvency advice before further enforcement or distribution. |
Companies House
Registration is evidence—not the whole answer
For most charges created by a UK company on or after 6 April 2013, the prescribed particulars and instrument must normally be delivered to Companies House within 21 days beginning with the day after creation.
If a registrable charge is not registered in time, it is generally void against a liquidator, administrator and creditor of the company, although the underlying secured money may become immediately payable. Late registration normally requires a court application.
What to obtain
Documents for a defensible review
- Current Companies House company and charge record
- Full debenture or charge instrument and schedules
- Date of creation, registration and any variation
- Asset description and restrictions on dealing
- Crystallisation provisions and notices relied upon
- Satisfaction, release or deed of priority documents
- Insolvency searches and office-holder details
- Evidence of ownership for the goods concerned
Insolvency priorities
Fixed and floating security rank differently
A fixed-charge holder will normally look to the proceeds of the specifically charged asset, subject to the validity and priority of the security and the costs properly payable from those assets.
Floating-charge realisations may be subject to preferential debts and the prescribed part reserved for unsecured creditors. The order of distribution, earlier security, set-off, expenses and the status of the particular asset can all affect the outcome.
Frequently asked questions
Fixed and floating charge questions
Does a debenture mean the bank owns the company's goods?
No. A debenture normally creates security. Ownership, possession, the type of charge and the company's right to deal with each asset remain separate questions.
Can an enforcement agent take control of goods subject to a floating charge?
A floating charge alone does not automatically make the goods someone else's property or exempt them from Schedule 12. The instrument, crystallisation, any office-holder appointment, insolvency restrictions and third-party claims must be checked before action proceeds.
Does crystallisation allow the lender to seize everything?
No. Crystallisation changes the operation of the charge over the assets it covers. The lender's enforcement and possession rights depend on the instrument, the assets, any appointment and the applicable insolvency law.
Is the Companies House register conclusive?
No. It identifies registered information and usually provides the filed instrument, but it may not show the current debt, every variation, asset ownership or the final legal character and priority of the security.
Can UK Bailiffs decide a charge or ownership dispute?
No. We can collect documents and conduct an operational review for an instruction, but contested ownership, security and priority require determination by the parties, their advisers or the court.
Primary references
Legislation and official guidance
- Companies Act 2006, Part 25 — registration of company charges
- Tribunals, Courts and Enforcement Act 2007, Schedule 12
- Insolvency Act 1986, section 175 — preferential debts
- Insolvency Act 1986, section 176A — prescribed part
- Insolvency Act 1986, Schedule B1 — administration
- Companies House: register particulars of a charge
- Companies House: find and update company information
This page provides general information, not legal advice. The effect of a charge and any insolvency process depends on the instrument, assets, dates and facts of the individual case.
Before enforcement
Send the debt authority and security documents
We will identify the operational information needed and flag charge, ownership or insolvency issues that require specialist advice before attendance.
