Charge structures and security
Debenture
A document creating a charge over the assets of a UK company in favour of a lender. The corporate-side counterpart to a property mortgage.
Debenture is a single document creating a charge over the assets of a UK company. On UK commercial mortgages the debenture is the corporate-side security that sits alongside the real-estate first charge, packaging together a fixed charge over named assets and a floating charge over everything else.
What a typical commercial mortgage debenture contains
- Fixed charge over the property (mirrors the standalone first charge).
- Fixed charge over specific named assets: key items of plant and machinery, intellectual property, named bank accounts, occasionally shares in subsidiaries.
- Floating charge over all other present and future assets of the company: book debts, stock-in-trade, work in progress, miscellaneous cash, other property.
- Negative pledges: undertakings not to grant other security or dispose of charged assets without lender consent.
The floating charge crystallises into a fixed charge on certain trigger events (default, insolvency, breach of covenants), at which point the lender has direct rights over the previously floating assets.
Debenture versus all-monies debenture
A plain debenture secures a specific debt or facility. An all-monies debenture secures every present and future liability owed to the lender. Plain debentures are cleaner and easier to release on redemption. All-monies debentures are wider and harder to negotiate down. See the all-monies debenture entry for the trade-offs.
Registration
A debenture granted by a UK limited company must be registered at Companies House within 21 days. Unregistered charges are void against a liquidator or administrator. Late registration requires a court order. UK commercial mortgage lenders’ solicitors handle this routinely; brokers should verify on completion that the MR01 filing is in place.
When a debenture is not given
Personal borrowers (individuals and partnerships) do not grant debentures because they are not companies. Their personal mortgages are secured by the property charge alone, supplemented by personal covenants. Pension scheme borrowers (SIPP, SSAS) grant property charges through the trustee, without a debenture.