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Scope of this Checklist

This Checklist sets out the factors to consider when a company is proposing to grant a fixed charge. It assumes that an English or Welsh company will be granting a number of fixed charges to a lender situated in England or Wales.

In this Checklist:

1. •

   the company granting the fixed charge is called the 'chargor'

2. •

   the entity to which the charge is granted is called the 'chargee', and

3. •

   the document containing the fixed charge is called the 'security document'

Fixed charges can be granted in a standalone security document or form part of the security created by a debenture (see: Documentation required to create a fixed charge below). Debentures also contain floating charges. For more information on floating charges, see: Taking security—floating charge—checklist and Practice Note: Fixed and floating charges.

Preliminary questions before taking security by way of a fixed charge

1. •

   Is a fixed charge the appropriate method of taking security?

   1. â—¦

      A fixed charge can be granted by a company, limited liability partnership and other bodies corporate. It can