Meaning
Statutory property provisions allow lenders to secure corporate credit facilities by establishing legal control over identified business assets. A fixed charge attachment encumbers specific equipment, real property, or intellectual assets, preventing the borrower from selling or transferring them without express creditor consent. The encumbrance grants the lender priority over unsecured creditors during asset liquidation.
Application covers identifiable, non-circulating assets retained permanently by the business, stopping short of circulating inventory or fluctuating trade receivables. Corporate registers record these charges to establish public notice of lender rights.
Asset Control
Lenders maintain strict control over charged property by restricting disposal rights in loan documentation. A fixed charge attachment prevents management from selling, leasing, or pledging specified machinery without prior written approval. If the borrower retains freedom to deal with the asset in ordinary business operations, courts recharacterise the encumbrance as a floating charge.
Control remains the defining legal distinction between fixed and floating security structures.
Perfection Requirement
Registration with public corporate registries establishes legal priority against subsequent creditors. A fixed charge attachment must be filed within statutory deadlines following security deed execution. Failure to register renders the charge void against liquidators and competing secured parties.
Proper filing ensures that third-party purchasers take title subject to the lender’s registered security interest.
Enforcement Precedence
Secured lenders execute remedies upon default by appointing receivers or taking possession of charged assets. A fixed charge attachment grants top priority in debt recovery distributions, ahead of preferential claims and floating charge holders. Proceeds from asset sales apply directly to discharging the underlying debt.
