ACCA Applied Skills · Corporate and Business Law (Global) · Loan capital

Delta Ltd created a charge on 1 March and the chargee registered it on 20 April, after the statutory registration period had expired. On 10 April, Delta Ltd had given a second charge over the same asset to Echo Bank, which registered on 11 April and had no knowledge of the first charge. Assuming no court relief is granted, which statement is correct?

Echo Bank's charge takes priority. Because the first charge was registered outside the time limit, it is void against later creditors who took security, so creation date does not protect it. Echo Bank registered promptly, so its charge prevails over the earlier but late-registered charge.

1. AThe first charge has priority because it was created first
2. BThe first charge has priority because the second chargee should have searched the register
3. CEcho Bank's charge takes priority because the first charge was not registered in time and is void against later secured creditorsCorrect