What is a Charge on Companies House (And Should You Be Worried)?
Feb 18, 2024 • Tom
What is a Charge on Companies House (And Should You Be Worried)?
📅 Last Updated: March 18, 2024
✍️ Author: Tom
Ever searched for a company on Companies House, only to see something called a “charge” attached to it?
What does it mean?
Is the company in trouble?
Is it a fine? A penalty? A wizard’s curse? 🧙♂️
Don’t panic—let’s break it down in simple terms.
1. What is a Charge on Companies House?
A charge is basically a loan security. It means a company has borrowed money and has pledged an asset as collateral.
💰 Company takes out a loan → 🏢 Pledges an asset as security → 📜 Charge gets recorded on Companies House
🔹 Why Does This Happen?
- Lenders want to protect their money
- If the company fails to repay, the lender can seize the asset
- It’s legally required to be registered on Companies House
💡 Think of it like getting a mortgage—your house is collateral, and the bank can repossess it if you stop paying.
2. What Kind of Charges Can a Company Have?
There are two main types of charges that show up on Companies House:
1️⃣ Fixed Charge (Specific Assets)
✅ Tied to a specific asset (e.g., property, equipment, vehicles)
✅ Company can’t sell or transfer the asset without lender permission
✅ If the company defaults, the lender takes the asset
💡 Example: A company takes a £500,000 loan from a bank and uses its office building as security. If the company can’t repay, the bank takes the office.
2️⃣ Floating Charge (General Assets)
✅ Covers multiple assets (e.g., stock, machinery, cash, receivables)
✅ The company can trade & sell assets normally
✅ If the company fails, the lender can seize any remaining assets
💡 Example: A retail business takes out a £100,000 loan and offers all its inventory as security. The company can still sell products, but if it fails, the lender can claim whatever stock is left.
🚨 Warning: If a company goes into liquidation, floating charges “crystallize” (meaning the lender suddenly takes priority over the assets).
3. How to Check if a Company Has Charges
Want to see if a company has any loans secured against it? It’s easy!
🔍 Steps to Check Company Charges
1️⃣ Go to Companies House → Find a UK Company
2️⃣ Search for the company name
3️⃣ Click on "View filing history"
4️⃣ Scroll to "Mortgages" or "Charges"
✅ If a charge is listed, the company has secured loans.
❌ If no charges appear, the company has no secured debt (or it’s a cash-rich unicorn 🦄).
4. Should You Be Worried About a Charge?
Not necessarily. A charge isn’t always a bad thing—in fact, many successful businesses have charges because they use loans to grow.
🔹 When It’s NOT a Red Flag
- The charge is normal for the industry (e.g., mortgages, equipment leasing)
- The company is profitable & repaying on time
- The charge is from a trusted lender (e.g., banks, investment firms)
💡 Translation: Just because a company has a mortgage doesn’t mean it’s going bankrupt—it might just be expanding!
🔹 When You Should Be Concerned
🚨 Red Flags:
- Too many charges → A company with multiple loans may be over-leveraged
- Charges from unusual lenders → Watch out for loans from high-risk finance companies
- Recent charge registrations before a downturn → Could mean the company is struggling
- Charges from HMRC → If the taxman is involved, it’s often bad news
💡 If a company suddenly takes out secured loans and stops filing accounts, it might be in trouble.
5. Can a Charge Be Removed?
Yes! A company can remove a charge if:
✅ The loan is fully repaid
✅ The lender releases the security
How to Remove a Charge
1️⃣ The lender confirms the loan is paid
2️⃣ A "satisfaction statement" is filed at Companies House
3️⃣ The charge is officially removed
💡 Think of it like paying off a mortgage—once it’s cleared, the bank releases the claim on your property.
6. Can a Charge Affect a Company’s Future?
Yes—having an active charge affects how other lenders & investors view the business.
🔹 How Charges Impact a Business
- Getting new loans → Some lenders might be hesitant if a company already has too many charges
- Selling the company → Buyers will check if existing loans need to be settled
- Going into liquidation → Secured creditors (charge holders) get paid first
💡 Translation: A charge isn’t necessarily bad, but it does limit a company’s flexibility in raising money or making big moves.
7. Quick Summary
✔️ A charge is a security for a loan—it protects lenders if a company can’t repay
✔️ Fixed charges → Tied to specific assets (e.g., property, vehicles)
✔️ Floating charges → Cover general assets (e.g., stock, cash, equipment)
✔️ Companies House records all charges publicly
✔️ Not all charges are bad—many businesses use them for growth
✔️ Red flags include too many charges, unusual lenders, or unpaid debts
🚀 So next time you see “charges” on a company’s record, you’ll know exactly what’s going on!
📌 Want to Research UK Companies?
🔍 Check out Datadini.ai for real-time UK business insights!
📌 Official Links:
🔥 Now you know exactly what charges mean—so you can read company records like a pro! 🚀
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