Chargor meaning

This checklist sets out the factors to consider when a company is proposing to grant a floating charge. This checklist proceeds on the basis that an English or Welsh company will grant a floating charge to a lender situated in England or Wales. The company granting the floating charge is the ‘chargor’. The entity receiving the floating charge is the ‘chargee’. The document recording the floating charge is the ‘security document’. For detailed guidance on the nature of floating charges and how they differ from fixed charges, see Practice Note: Fixed and floating charges. For the advantages and disadvantages of taking a floating charge, see Practice Note: Floating charges—advantages and disadvantages. For in-depth considerations when taking a floating charge, see Practice Note: Floating charges. A floating charge may form part of the security package created by a debenture—see Practice Note: Key features of debentures. Debentures typically also include other security interests, such as mortgages, assignments and fixed charges. A floating...

Scope of this Checklist This Checklist outlines the considerations when a company plans to grant a fixed charge. It assumes an English or Welsh company will confer multiple fixed charges on a lender located in England or Wales. In this Checklist: the company giving the fixed charge is the ‘chargor’ the recipient of the charge is the ‘chargee’ the instrument recording the fixed charge is the ‘security document’ Fixed charges may be created in a standalone security document or as part of the security within a debenture (see: Documentation required to create a fixed charge below). For further details, see: Practice Note: Fixed and floating charges. Preliminary questions before taking security by way of a fixed charge Is a fixed charge the appropriate method of taking security? A fixed charge may be granted by a company, a limited liability partnership, and other corporate bodies. It may also be granted...

Re Avanti Communications Ltd [2023] EWHC 940 (Ch) This marks the first substantial judgment on the divide between fixed and floating charges since the House of Lords’ landmark ruling in Re Spectrum Plus [2005] UKHL 41, which reclassified an apparent fixed charge over book debts as floating because the chargor could freely deploy the charged assets and the security holder therefore lacked the requisite control to constitute a fixed charge. The designation of security as ‘fixed’ or ‘floating’ under English law now carries even greater weight given HMRC (the UK tax authority) ranks as a preferential creditor for certain taxes in insolvency—ie those taxes sit behind fixed charge realisations but ahead of floating charge realisations. That characterisation had a decisive effect on the order of payments in Avanti’s administration: as the charge was properly treated as fixed, the secured creditors recovered in full; had it instead been treated as floating, part of the proceeds would have been payable to HMRC (as preferential creditor) and to unsecured creditors up to...

Brierley v Otuo and others [2024] EWHC 2549 (Ch) What are the practical implications of this case? This decision is a reminder that where enforcement takes place and an order for sale is obtained but no ultimate sale of the charged property occurs, a charging order may leave a judgment creditor who does not pursue redemption in a different position from a mortgagee. A mortgagee may benefit from express provisions in a written security document enabling recovery of the costs of sale and the enforcement of a charged property. In this matter, the court made final charging orders together with orders for sale; however, a series of historic orders were also made which, in combination, had the overall effect of releasing the security before any actual sale or redemption took place. The claimant had not taken earlier steps to secure recovery of such costs, and that omission proved fatal on the facts. The Master in the lower court directed the parties to the applicable principle: unless there is an...

Re UKCloud Ltd (in liquidation) [2024] EWHC 1259 (Ch) What are the practical implications of this case? In Re UKCloud Ltd (in liquidation), the court concluded that security over Internet Protocol (IP) addresses operated as a floating charge, despite wording in the debenture purporting to create a fixed charge. What proved decisive was the absence of genuine, operational control exercised by the chargee in practice. The ruling serves as a caution that a fixed charge requires demonstrable control by the secured party; mere restrictions on disposals in the security document will not suffice where, in reality, the chargor is left free to conduct its business and use the assets as it chooses. The court was further guided by earlier authorities endorsing an ‘all or nothing’ approach, under which assets captured by a single charging clause must all take the same character — fixed or floating. On that basis, where any assets within the scope of the clause are properly characterised as subject to a floating charge because the chargee...

Practice Note This Practice Note sets out the principal drafting, negotiating and legal considerations for a typical bilateral debenture issued for a particular deal with a single security provider. It is equally applicable to syndicated and all monies debentures, and to arrangements involving several security providers. Here, the security provider is called the Chargor and the secured party the Lender. It also signposts answers to commonly asked questions. A debenture is commonly used when the lender seeks security over a company’s entire asset base. For introductory guidance on debentures—what a debenture entails and who may grant one—see Practice Note: Key features of debentures. For broader guidance on preparing and negotiating security documents, including selecting an appropriate precedent and early-stage considerations, see Practice Note: How to draft and negotiate security documents in loan transactions. Debentures vary in structure, yet they tend to share similar provisions and usually adopt a common core format. For ease of use, the corresponding clause references are included in our Debenture: single company chargor—bilateral—specific monies. This...

This Practice Note outlines: the various forms of share security the principal enforcement options available to security holders practical factors for security holders when choosing appropriate enforcement mechanics further considerations for security holders depending on the context Forms of share security There are three primary categories of security that can be created over shares: (a) a charge, (b) a legal mortgage and (c) an equitable mortgage, each considered below. Historically, a pledge over shares was also possible. A pledge involves delivering possession of an asset as security for the repayment of a monetary debt. This was feasible where bearer shares existed. However, from 26 May 2015, under section 779 of the Companies Act 2006, companies have been prohibited from issuing bearer shares. Holders of bearer shares were granted until 26 February 2016 to surrender them and convert into registered shares (for further information, see News Analysis: Bearer shares—how to avoid a grizzly ending). Charge A charge arises from...

STOP PRESS : On 18 March 2026, the Pension Protection Fund (PPF) released its levy policy statement and the definitive rules for 2026/27, together with scheme guidance explaining how to comply with the levy framework and how the PPF intends to exercise discretion where the rules allow. These documents implement the PPF’s earlier message: no PPF levy will be charged to conventional schemes in 2026/27, while the proportionate, risk-based Alternative Covenant Schemes (ACS) levy will be retained. Although the current ACS framework is broadly unchanged, the PPF has pledged to fast-track a review of the ACS levy methodology so it remains proportionate from 2027/28 onwards. In the interim, a small suite of targeted refinements is being introduced, as consulted on, alongside a minor addition to the ACS Guidance reflecting consultation feedback. The PPF also draws attention to the closure of its insolvency risk portal from 1 April 2026 and advises schemes to download any data they may need for the future by 31 March 2026...

This Deed is made on [ insert day and month ] 20[ insert year ] Parties [ Insert name of Chargor ], being a company incorporated in England and Wales, with registered number [ insert company number ], and whose registered office is at [ insert address ] (the “ Chargor ”); and 1 [ Insert name of Security Agent ], acting as security agent and trustee for the Finance Parties pursuant to the terms and conditions set out in the [ Facilities Agreement OR Intercreditor Agreement OR Security Trust Deed ] (the “ Security Agent ”). Recitals: (A) The Finance Parties have consented to provide loan facilities subject to the terms and conditions set out in the Facilities Agreement (as defined below). (B) As a condition precedent to the loan facilities becoming available, the Chargor must execute this Deed for the purpose of granting security in favour of the Security Agent in relation to the Secured Obligations (as defined below)...

[ Place on the letterheaded paper of the party lodging form MR01 ] [ enter date ] For the attention of: The Registrar of CompaniesCompanies HouseCrown WayCardiffCF14 3UZ Dear [ enter organisation name ] [ enter name of Chargor ]—Company number [ enter company number ] 1 We refer to the [ enter name of...

This Deed is executed on [ insert day and month ] 20[ insert year ] Parties [ insert name of Chargor ], a company incorporated in England and Wales with registered number [ insert company number ], with its registered office at [ insert address ] (the Chargor); and [ insert name of Lender ] of [ insert address ] (the Lender). Recitals: The Lender has agreed to provide a loan facility to the Chargor on the terms and conditions contained in the Facility Agreement (as defined below). As a condition precedent to the availability of that facility, the Chargor must enter into this Deed to create security in favour of the Lender for the Secured Obligations (as defined below)...