Corporate and Business Law (Global) · Loan capital

Registration of Charges for ACCA Corporate and Business Law

Updated 11 October 2026 · Fact-checked

A company that gives a charge over its assets to secure a loan must register it at the company registry within the time limit, which is 21 days in the UK model. If it is not registered, the charge is void against the liquidator and other creditors, but the debt itself remains valid.

Understand Registration of Charges

A charge is security over a company's assets. A lender lends money and takes a right to be paid from certain assets if the company defaults. Charges are usually given in a debenture. They can be fixed (over a specific asset) or floating (over a changing pool of assets).

The problem is secrecy. If a company could give secret security, other creditors and later lenders would not know which assets were already pledged. They might lend on the false belief that the assets were free. Registration solves this. The charge goes on a public record at the company registry, and anyone can search it.

The rule is simple. The company (or the lender) delivers details of the charge, with a copy of the instrument that created it, to the registry within a fixed time after the charge is created. The 21-day period is the UK model and is used here as an example. LW (Global) is not tied to UK law, so the principle matters more than local detail. Check your syllabus wording. The registry then issues a certificate of registration. As a UK example only, the certificate is conclusive evidence that the registration requirements were satisfied.

The key point is the effect of failure. An unregistered charge is void against a liquidator, an administrator and any creditor of the company. This means the lender cannot enforce its security against them and ranks as an unsecured creditor. The charge stays valid between the company and the lender. It is not void against the company itself. The lender is not left with nothing, because the loan is still a valid debt. In some jurisdictions, such as the UK, the money secured also becomes payable immediately when registration fails. Treat this as a UK-based example, not a rule for every question. Failure to register can also be an offence by the company and its officers, usually punishable by a fine.

Two more points to remember. A late registration is usually possible only with court permission, which is not automatic, and it does not cure problems that arose in the gap, for example if the company has gone into liquidation. And registration does not decide priority on its own. It makes the charge valid against others. Priority between charges is a separate topic.

Key formulas to remember

Time limit for registration: Register within 21 days (UK model), counting from the day after the charge is created; The 21 days and the day-counting convention follow the UK model. The Global syllabus tests the principle of registering within a set time, and exam questions normally give clear dates. If the question gives a different period, use it. Count from creation of the charge, not from the date of the loan if they differ.
Effect of non-registration: Unregistered charge = void against liquidator, administrator and creditors; The charge cannot be enforced against those parties. It stays valid between the company and the lender, so it is not void against the company itself.
Effect on the debt: Debt remains valid; the lender is an unsecured creditor; In some jurisdictions, such as the UK, the secured money also becomes payable immediately on failure to register. Say this only if your syllabus or the question points to it.
Who may register: Company or any person interested in the charge; The duty is on the company, but the lender usually registers to protect itself.
Consequence for the company: Failure to register can be an offence by the company and its officers; Usually a fine. State this briefly after the main effect.

How to solve Registration of Charges questions

Use this method for any question on registration of charges, whether it is a one-line objective test question or a longer scenario. The 21-day period and the payable-immediately rule below are UK-based examples. LW (Global) tests the principle, so use any period the question gives.

1Identify whether the question involves security given by a company for a loan. If no charge exists, registration is not the issue.
2Find the date the charge was created and the date it was registered or delivered to the registry.
3Count the days. Day-counting follows the UK model: day 1 is the day after creation, so the day number equals the days after creation. Exam questions normally give clear dates. Compare with the time limit (21 days in the UK model, or the period the question gives).
4Decide whether registration was in time. If yes, the charge is valid against the liquidator and creditors, subject to priority rules.
5If it was late or never done, state that the charge is void against the liquidator, administrator and creditors. It remains valid between the company and the lender.
6Say what happens to the debt: it stays valid and the lender is unsecured. If your syllabus follows the UK rule, add that the money secured becomes payable immediately.
7Check whether the question asks about the company or officers. If so, mention the possible offence and fine.
8Match your answer to the option wording. Reject options that say the loan itself is void.

Quickest way: Three-check shortcut

When to use it: Use this in Section A or Section B objective questions when you have about a minute.

Check one: was it a charge given by a company? If yes, it must be registered.
Check two: was it registered within the time limit (21 days in the UK model)? If no, the security is void against liquidator and creditors.
Check three: pick the option that says the lender is unsecured but the debt still stands. Reject any option saying the debt is cancelled.

Common mistakes in Registration of Charges

Saying the loan is void if the charge is not registered.
Students mix up the security with the debt.
Fix: Only the charge is void against the liquidator and creditors. The company still owes the money and the lender is an unsecured creditor.
Saying the charge is void against the company itself.
The word void is read too broadly.
Fix: Remember the list of protected parties: liquidator, administrator and creditors. Learn it as a set. The charge stays valid between the company and the lender.
Miscounting the 21 days.
Students count from the loan date or include the creation day.
Fix: In the UK model, the day after the charge is created is day 1. Exam questions normally give clear dates, so count carefully from the creation date of the charge, not an earlier discussion or later drawdown.
Assuming late registration always repairs the position.
Students think any registration cures the defect.
Fix: A late registration normally needs court permission, and it does not help against a liquidator who has already acted in the gap.
Confusing registration with priority.
Both topics deal with charges and are taught together.
Fix: Registration decides whether the charge is valid against others. Priority decides who is paid first among valid charges.
Forgetting that both fixed and floating charges are covered.
Students link registration only to floating charges over a business.
Fix: Treat registration as applying to company charges generally, subject to the exact syllabus wording.

Worked examples

Example 1

Alpha Ltd gives a bank a floating charge over its inventory on 1 March to secure a loan of $200,000. The bank does not register it. Alpha Ltd goes into liquidation six months later. State the bank's position.

Show the solution

The charge was given by a company to secure a loan, so it had to be registered.
It was never registered, so the time limit (21 days in the UK model) was missed.
An unregistered charge is void against the liquidator and the creditors.
The bank loses its security over the inventory as against them.
The loan is still a valid debt. The bank ranks as an unsecured creditor for $200,000.

Answer: The floating charge is void against the liquidator and creditors. The bank is an unsecured creditor for $200,000.

Example 2

Assume the UK 21-day rule applies. Beta Ltd grants a fixed charge over its land to a lender on 10 June. Details are delivered to the registry on 28 June. Which statement is correct: (A) the charge is void because registration took longer than 7 days; (B) the charge was registered in time; (C) the loan is void; (D) the charge is valid only if the court approves?

Show the solution

Creation date is 10 June. Under the UK model, day 1 is 11 June.
28 June is day 18, because 28 minus 10 equals 18.
Day 18 is inside the 21-day limit.
So the charge was registered in time and is valid against the liquidator and creditors.
Option A uses a limit that does not exist. Option C confuses the debt with the security. Option D applies only to late registration.

Answer: (B) The charge was registered in time.

Exam tips

Learn the one-line effect: void against liquidator and creditors, debt still valid. This helps with objective questions.
Always count the days. A scenario may put the registration date just inside or just outside the limit.
In a written answer, give the rule, apply the dates, then state the result for the lender and the debt.
Watch for options that say the loan is void or the company is released. These are wrong.
Link to priority only if the question asks. Keep registration and priority answers separate.

Practice questions from Loan capital

Registration of Charges in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Registration of Charges: frequently asked questions

What happens if a charge is not registered?

The charge is void against the liquidator, administrator and creditors of the company. The lender loses its security and becomes an unsecured creditor. The debt itself remains valid. In some jurisdictions, such as the UK, the secured money also becomes payable immediately.

What is the time limit for registering a charge?

The 21-day limit follows the UK model, and under that model day 1 is the day after the charge is created. Exam questions normally give clear dates. Check the exact wording in your syllabus, and learn the principle and the consequence of missing it.

Who is responsible for registering a charge?

The company has the duty to register. In practice the lender often registers it, because the lender is the one who loses security if it is not done. Either may register.

Can a charge be registered late?

Usually only with court permission, and this is not automatic. Even then, late registration does not protect the lender against steps taken by others in the gap, such as a liquidation.