What does crystallisation of a floating charge mean?

A floating charge crystallises when it becomes a fixed charge, usually after an event such as default, insolvency, enforcement action, or another trigger stated in the debenture.

Can a UK debenture include both fixed and floating charges?

Yes. A debenture can contain both fixed and floating charges to give the lender security over specific assets and the company’s wider business assets.

What is the difference between a legal mortgage and an equitable mortgage?

A legal mortgage transfers legal title to the lender subject to the borrower’s right to redeem, while an equitable mortgage gives a security interest without transferring full legal title.

What is an assignment by way of security in a debenture?

An assignment by way of security transfers rights, such as contract rights or receivables, to the lender as collateral until the secured debt is repaid.

How do pledges and liens differ from charges?

A pledge gives the lender possession of an asset as security, while a lien allows a creditor to retain possession of an asset until payment is made.

Does a debenture need to be registered at Companies House?

Most company debentures and charges must be registered at Companies House within 21 days of creation, or the security may be void against a liquidator, administrator, or creditor.

How is priority between security interests decided?

Priority usually depends on registration, the type of security, contractual priority arrangements, and whether assets are subject to fixed or floating charges.

Why does the type of security interest matter in a debenture?

Yes. Errors in identifying assets, choosing the wrong security type, or failing to register the debenture can reduce enforceability or priority.

What happens if a borrower defaults under a debenture?

The lender can usually enforce the secured assets, appoint an administrator or receiver where permitted, or take other enforcement steps set out in the debenture and applicable law.

Can any business use a UK debenture?

UK company debentures are commonly used by limited companies and lenders. Individuals and partnerships may require different security documents and legal checks.

Can I generate a UK debenture online?

You can use an AI legal document generator to create a draft UK debenture, but the document should be reviewed for your transaction, assets, lender requirements, and registration obligations.

EN-GB>Finance>Debenture>Types of Security Interests in UK Debentures

Types Of Security Interests In UK Debentures

Created: 10 Jun 2026

This article explains the main types of security interests used in UK debentures, helping lenders and businesses understand their rights, risks, and priorities. For broader context, visit our AI Generated British Debenture category page.

Description	Typical Secured Assets	Companies House Registration Relevance	Control Requirement Level	Drafting Considerations
Fixed charge
Security over specific assets that the chargor cannot freely dispose of without consent.	Land, plant, machinery, shares, IP, material contracts and bank accounts.	Usually required	High	Identify assets clearly and restrict disposal, release and use of proceeds.
Floating charge
Security over a changing class of assets which the chargor may use until crystallisation.	Stock, inventory, receivables, cash, work in progress and general undertaking.	Usually required	Low	Include crystallisation triggers, negative pledge, ranking and permitted disposal provisions.
All-assets debenture
A composite security document combining fixed and floating security over substantially all company assets.	All present and future assets, undertaking, property, rights and revenues.	Usually required	Medium	Use asset-specific clauses and avoid relying only on broad catch-all wording.
Legal mortgage over land
A mortgage taking legal security over freehold or leasehold land by deed.	Freehold property, long leaseholds and registered real estate interests.	Usually required	Medium	Execute as deed and arrange Land Registry and Companies House filings.
Equitable mortgage over land
Equitable security over land, often arising where legal mortgage formalities are not completed.	Beneficial interests, unregistered interests or land awaiting registration.	Usually required	Medium	Protect by notice or restriction and complete any pending legal mortgage steps.
Fixed charge over bank accounts
Security over account balances intended to prevent unrestricted withdrawals or use by the chargor.	Current accounts, deposit accounts, collection accounts and blocked accounts.	Usually required	High	Use account control, blocked withdrawal rights and bank acknowledgement wording.
Floating charge over bank accounts
Security over account balances where the chargor may keep operating the account.	Trading accounts, operating accounts and cash collections used in business.	Usually required	Low	State floating nature and define crystallisation, sweeps and post-default controls.
Fixed charge over receivables
Security over book debts and proceeds intended to restrict collection and use.	Trade debts, invoices, contract receivables and insurance proceeds.	Usually required	High	Control collections and require proceeds into blocked or controlled accounts.
Floating charge over receivables
Security over debts where the chargor may collect and use proceeds in trading.	Book debts, invoices, debtor balances and other trade receivables.	Usually required	Low	Address debtor notices, set-off, dilution, collection accounts and crystallisation.
Legal assignment by way of security
An absolute written assignment of rights, with notice, held as security for debt.	Receivables, insurance claims, contract rights and intra-group debts.	Usually required	High	Give written notice and check anti-assignment clauses and set-off rights.
Equitable assignment by way of security
Security assignment that is effective in equity but does not meet legal assignment requirements.	Future receivables, partial debts, contract rights and unnotified claims.	Usually required	Medium	Consider notices, priority, further assurance and assignment restrictions.
Charge over shares
Security over shares and related rights, often supported by transfer documents.	Shares, dividends, distributions, voting rights and share sale proceeds.	Usually required	High	Take certificates, signed transfers, register restrictions and dividend provisions.
Legal mortgage over shares
Shares are transferred to the mortgagee or nominee subject to redemption rights.	Certificated shares in private companies and related shareholder rights.	Usually required	High	Consider transfer registration, voting control, tax, financial assistance and PSC issues.
Charge over intellectual property
Security over registered and unregistered IP rights and related income.	Trade marks, patents, designs, copyright, domain names and licence income.	Usually required	Medium	List key registrations and consider UK IPO or other registry filings.
Patent mortgage or charge
Security over patents or patent applications, registrable against the patent register.	UK patents, patent applications and patent licence income.	Usually required	Medium	Record security at UK IPO and include application and renewal covenants.
Trade mark mortgage or charge
Security over registered trade marks or applications, registrable as a transaction.	UK trade marks, applications, brands and related goodwill.	Usually required	Medium	Record at UK IPO and restrict abandonment, licensing and disposal.
Registered design charge
Security over registered designs and applications, capable of register recordal.	UK registered designs, applications and design licence revenue.	Usually required	Medium	Record interest, list registrations and require renewal and enforcement covenants.
Charge over copyright
Security over copyright works and income, usually without a central UK register.	Software code, literary works, media content, databases and royalties.	Usually required	Medium	Describe works, include source code access and restrict licences and assignments.
Fixed charge over plant and machinery
Security over identifiable equipment that should not be sold without consent.	Manufacturing equipment, tools, servers, vehicles and production lines.	Usually required	Medium	Use schedules, serial numbers, insurance covenants and disposal restrictions.
Floating charge over stock and inventory
Security over trading stock that the chargor may sell and replace normally.	Raw materials, finished goods, retail stock and work in progress.	Usually required	Low	Define permitted sales, retention of title risks and inventory reporting.
Fixed charge over stock
Security over inventory intended to stop ordinary disposal without consent.	High-value inventory, pledged goods and segregated commodities.	Usually required	High	Require segregation, custody controls and strict consent for release or sale.
Pledge
Possessory security where the secured party or agent holds the secured asset.	Goods, commodities, negotiable instruments, certificates and documents of title.	Sometimes required	High	Maintain possession or control and document custodian or warehouse arrangements.
Lien
Right to retain possession of property until a debt or obligation is satisfied.	Goods, documents, securities and property held by a creditor or agent.	Sometimes required	High	Specify retained assets, secured obligations and loss of lien on release.
Contractual lien
Express contractual right to retain or sometimes sell property as security.	Goods in storage, documents, equipment and customer property.	Sometimes required	High	Draft sale rights, notice periods, storage costs and priority mechanics.
Charge over securities account
Security over securities credited to an account and related cash or distributions.	Listed shares, bonds, fund units, CREST securities and investment accounts.	Sometimes required	High	Use account control, intermediary notices and financial collateral analysis.
Financial collateral security interest
Security over financial collateral benefiting from special rules if formal conditions are met.	Cash, financial instruments and credit claims in qualifying arrangements.	Sometimes required	High	Ensure possession or control and consider disapplication of registration requirements.
Title transfer financial collateral arrangement
Collateral provider transfers full ownership of financial collateral to secure obligations.	Cash margin, securities collateral and derivative collateral assets.	Usually not required	High	Draft close-out netting, return obligations and eligible collateral mechanics.
Charge over cash deposit
Security over cash standing to a deposit account, often with withdrawal restrictions.	Term deposits, rent deposits, cash collateral and reserve accounts.	Usually required	High	Block withdrawals and address bank set-off, interest and release conditions.
Rent deposit charge
Security over a cash deposit supporting tenant lease obligations.	Rent deposit account, interest and related repayment rights.	Sometimes required	High	Clarify trust or charge structure and register if a registrable charge is created.
Charge over contractual rights
Security over rights to payment, performance or claims under contracts.	Key customer contracts, supply contracts, licences and project agreements.	Usually required	Medium	Check consent, termination, confidentiality and anti-assignment provisions.
Charge over insurance proceeds
Security over insurance policy rights and proceeds payable after insured events.	Property insurance, business interruption proceeds and liability claim recoveries.	Usually required	Medium	Require loss payee wording, notices to insurers and policy maintenance covenants.
Charge over intra-group receivables
Security over debts owed to the chargor by group companies.	Intercompany loans, management charges and upstream balances.	Usually required	Medium	Address subordination, set-off, repayment blocks and notices to debtors.
Charge over goodwill
Security over business reputation, customer connection and sale value of the business.	Business goodwill, brand value, customer relationships and going-concern value.	Usually required	Low	Combine with IP, trading name and business sale enforcement provisions.
Charge over uncalled capital
Security over the company's right to call unpaid amounts on issued shares.	Uncalled share capital and rights against shareholders for unpaid amounts.	Usually required	Medium	Check articles, shareholder obligations and enforcement mechanics for making calls.
Charge over calls made but unpaid
Security over debts arising after share capital has been called but not paid.	Called share capital, shareholder debts and related enforcement claims.	Usually required	Medium	Coordinate with receivables security and shareholder notice requirements.
Charge over book debts
Security over debts recorded in the business books, fixed or floating depending on control.	Customer debts, ledger balances, invoices and collection proceeds.	Usually required	High	Match fixed or floating label to actual collection and proceeds control.
Assignment of rent
Security assignment of rental income payable under occupational leases.	Rent, licence fees, service charge income and lease receivables.	Usually required	Medium	Serve tenant notices and coordinate with account controls and property mortgage.
Charge over rental income
Charge over income generated by letting or licensing property.	Rent, turnover rent, licence fees and arrears from tenants.	Usually required	Medium	Direct payments to controlled accounts and address tenant set-off rights.
Charge over licences and permits
Security over transferable licence rights and related economic benefits.	Operating licences, software licences, permits and regulatory authorisations.	Usually required	Medium	Check transferability, regulator consent, termination rights and assignment bans.
Charge over domain names
Security over domain registrations and related contractual rights with registrars.	UK domains, generic domains, registrar accounts and website addresses.	Usually required	Medium	List domains and require renewal, registrar access and transfer cooperation.
Charge over database rights
Security over database rights, copyright and commercial value in datasets.	Customer databases, product data, analytics datasets and database licences.	Usually required	Medium	Address data protection, access credentials, backups and licensing limits.
Charge over software
Security over software copyright, source code, object code and related rights.	Source code, repositories, object code, APIs and software licences.	Usually required	Medium	Secure repository access, escrow, contributor rights and open-source compliance.
Charge over vehicles
Security over identified vehicles and related insurance or sale proceeds.	Cars, vans, HGVs, trailers, plant vehicles and fleets.	Usually required	Medium	List VINs, require insurance and check finance leases or HP ownership.
Ship mortgage
Statutory mortgage over a registered ship or share in a ship.	UK registered ships, vessels and shares in vessels.	Sometimes required	Medium	Register at ship registry and coordinate insurance, earnings and requisition proceeds.
Aircraft mortgage
Mortgage over aircraft, commonly recorded on the UK aircraft mortgage register.	Aircraft, engines, airframes, parts and related proceeds.	Sometimes required	Medium	Record mortgage with CAA and address Cape Town interests if applicable.
Agricultural charge
Special statutory floating security granted by a farmer over farming assets.	Crops, livestock, farming stock, machinery and agricultural assets.	Sometimes required	Low	Consider agricultural charge registration and interaction with Companies House filings.
Charge over crops
Security over growing or harvested crops and related sale proceeds.	Growing crops, harvested crops, produce and crop sale receivables.	Sometimes required	Medium	Identify land, crop cycle, storage, insurance and sale proceeds controls.
Charge over livestock
Security over animals and proceeds from sale, breeding or products.	Cattle, sheep, pigs, poultry, milk proceeds and offspring.	Sometimes required	Medium	Address identification, welfare, insurance, movement rules and replacement stock.
Charge over future assets
Security attaching to assets acquired by the chargor after the debenture date.	Future equipment, receivables, IP, shares, contracts and real estate.	Usually required	Medium	Include after-acquired property wording and further assurance obligations.
Charge over proceeds
Security over money or assets received from sale, insurance or enforcement of charged assets.	Sale proceeds, insurance proceeds, compensation and damages recoveries.	Usually required	High	Require controlled accounts and preserve fixed security over proceeds.
Charge over compensation payments
Security over statutory, contractual or tort compensation payable to the chargor.	Compulsory purchase compensation, damages, indemnities and warranty claims.	Usually required	Medium	Cover claims, proceeds, notices and application of recoveries after default.
Charge over negotiable instruments
Security over instruments whose possession and endorsement may affect enforcement.	Bills of exchange, promissory notes, cheques and negotiable certificates.	Sometimes required	High	Take possession, endorsements and custody instructions where relevant.
Charge over documents of title
Security over documents controlling possession or delivery of goods.	Bills of lading, warehouse receipts, dock warrants and delivery orders.	Sometimes required	High	Control originals, endorsements, warehouseman notices and release conditions.
Mortgage over leasehold interest
Legal or equitable mortgage over the chargor's leasehold estate.	Long leases, occupational leasehold interests and lease premiums.	Usually required	Medium	Check landlord consent, forfeiture risk and Land Registry requirements.
Charge over lease rights
Security over contractual rights and claims arising under leases rather than the estate itself.	Lease claims, break rights value, rent review claims and landlord covenants.	Usually required	Medium	Review lease assignment restrictions, consent requirements and notices.
Charge over partnership or LLP interests
Security over economic rights in a partnership or LLP interest.	Profit shares, capital accounts, drawings and distribution rights.	Sometimes required	Medium	Check constitutional documents, transfer consent and member default rights.
Charge over beneficial interest under a trust
Security over the chargor's equitable beneficial interest in trust property.	Beneficial interests in land, shares, funds or other trust assets.	Usually required	Medium	Comply with writing formalities and notify trustees where appropriate.
Charge over share sale proceeds
Security over money or consideration received from disposal of charged shares.	Cash sale proceeds, deferred consideration and earn-out payments.	Usually required	High	Require proceeds into controlled accounts and cover non-cash consideration.
Charge over dividends and distributions
Security over income and distributions from shares or other equity interests.	Dividends, redemption proceeds, distributions and liquidation proceeds.	Usually required	Medium	Specify pre-default payment rights and post-default collection by secured party.
Negative pledge
Contractual promise not to create competing security or dispose of assets.	All assets, material assets or specified collateral pools.	Usually not required	Low	Define permitted security, permitted disposals and consequences of breach.
Assignment of bank account rights
Security assignment of the customer's contractual rights against the account bank.	Deposit account claims, interest and repayment rights against banks.	Usually required	High	Serve bank notice and obtain acknowledgement, waiver and account control terms.
Charge-back over deposit with lender
Security over a deposit owed by the secured lender to the chargor.	Cash deposit accounts held with the secured lender.	Usually required	High	Address set-off, withdrawal blocks and insolvency characterisation issues.
Contractual set-off arrangement
Contractual right to net mutual debts, often used alongside security rather than as a charge.	Mutual payment obligations, bank balances and trading account debts.	Usually not required	Low	Coordinate with insolvency set-off, account terms and security enforcement rights.
Retention of title arrangement
Seller retains ownership of goods until payment, affecting what assets the chargor owns.	Supplied goods, resale proceeds and mixed inventory claims.	Usually not required	Low	Due diligence supplier terms and exclude assets not owned by chargor.
Finance lease or hire purchase interest
Financier retains ownership while the company has possession and use of the asset.	Vehicles, machinery, office equipment and specialist plant.	Usually not required	Low	Check ownership, consent to security and termination on insolvency or default.
Charge over litigation proceeds
Security over recoveries from claims, judgments, settlements or arbitral awards.	Damages, settlement sums, costs awards and judgment debts.	Usually required	Medium	Describe claims, control settlements and address solicitor undertakings or liens.
Charge over tax refunds
Security over repayments or credits due from tax authorities.	VAT repayments, corporation tax refunds and R&D tax credits.	Usually required	Medium	Check assignability, HMRC set-off and payment direction practicality.
Charge over energy certificates and environmental credits
Security over tradeable environmental rights, credits and related income streams.	Renewable certificates, carbon credits, subsidies and environmental receivables.	Usually required	Medium	Check scheme rules, registry transfer mechanics and eligibility conditions.
Charge over cryptoassets
Security over digital assets, with enforceability depending on control and asset nature.	Cryptocurrency, tokens, wallets, exchange accounts and private keys.	Usually required	High	Address custody, private keys, valuation, transfer restrictions and enforcement route.
Charge over merchant receivables
Security over card processor, payment platform and merchant settlement receivables.	Card settlements, payment gateway balances and platform receivables.	Usually required	Medium	Review processor terms, set-off, chargebacks and payment redirection rights.
Charge over physical cash
Security over identifiable physical cash held by or for the chargor.	Till cash, vault cash, petty cash and cash in transit.	Usually required	High	Use possession, segregation, cash collection controls and insurance covenants.
Charge over warehouse goods
Security over goods stored with a warehouseman or logistics provider.	Stored inventory, commodities, spare parts and fulfilment stock.	Usually required	Medium	Obtain warehouse acknowledgements, access rights and release controls.
Charge over commodities
Security over bulk commodities, often requiring segregation or document control.	Metals, oil, grain, soft commodities and commodity receivables.	Usually required	High	Address commingling, title documents, storage, inspection and hedging proceeds.

What Security Interests Are Commonly Included In A UK Debenture?

A UK debenture commonly combines fixed charges over identifiable assets, floating charges over changing asset classes, and sometimes assignments or mortgages for particular assets. The strongest protection usually comes from a fixed charge, but only where the drafting and practical restrictions give the lender sufficient control over the asset and its proceeds.

When Does Companies House Registration Matter?

For a UK company or LLP, most charges created by a debenture must be registered at Companies House within the statutory period. Failure to register generally makes the charge void against a liquidator, administrator and creditors, although the debt itself remains payable. Registration is therefore a core completion step for fixed charges, floating charges, legal mortgages and many assignments by way of security.

Why Is Control Important For Fixed Charges?

Assets such as receivables, bank accounts, stock and cash proceeds may be recharacterised as floating charge security if the chargor is free to collect, withdraw, dispose of or use them in the ordinary course of business. Debentures should align the label used in the document with operational controls, blocked accounts, consent rights and permitted disposal wording.

Which Assets Need Extra Formalities Beyond A Debenture?

Land usually needs Land Registry formalities as well as Companies House registration.
Shares commonly require share certificates, stock transfer forms and company register restrictions.
Intellectual property may need extra filings at the UK IPO or relevant registry.
Contract rights may require notice to the counterparty and checks for anti-assignment clauses.
Financial collateral may depend on possession or control arrangements to obtain special insolvency treatment.

Types of Security Interests in UK Debentures

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FAQs

What is a UK debenture?

A UK debenture is a security agreement, usually created by a company, that grants a lender security interests over the company’s assets to secure repayment of debt.

What types of security interests can be included in a UK debenture?

What is the difference between a fixed charge and a floating charge?

What assets can be covered by a fixed charge in a debenture?

What assets are usually covered by a floating charge?

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