charge

1. A formal accusation of a crime, usually made by the police after *interrogation. See also *indictment.
2. Instructions given by a judge to a jury.
3. A legal or equitable interest in land, securing the payment of money. It gives the creditor in whose favour the charge is created (the chargee) the right to payment from the income or proceeds of sale of the land charged, in priority to claims against the debtor by unsecured creditors. Under the Law of Property Act 1925 the only valid legal charges are: (1) a *rentcharge payable immediately and for a fixed period or in perpetuity; (2) a charge by way of legal *mortgage; and (3) certain charges arising under statute. All others take effect as equitable interests. Equitable charges, and second or subsequent legal mortgages, will be enforceable against third parties only if they are registered (see *registration of encumbrances). See also *equitable charge.
4. An interest in company property created in favour of a creditor (e.g. as a *debenture holder) to secure the amount owing. Most charges must be registered at the Companies Registry. A fixed charge is attached to a specific item of property (e.g. land); a floating charge is created in respect of circulating assets (e.g. cash, stock in trade), to which it will not attach until crystallization, i.e. until some event (e.g. winding-up) causes it to become fixed. Before crystallization unsecured debts can be paid out of the assets charged. After, the charge is treated as a fixed charge and therefore unsecured debts (except *preferential debts under the Insolvency Act 1986) rank after those secured by the charge (see also *fraudulent preference). A charge can also be created upon shares. For example, the articles of association usually give the company a *lien in respect of unpaid *calls, and company members may, in order to secure a debt owed to a third party, charge their shares, either by a full *transfer of shares coupled with an agreement to retransfer upon repayment of the debt or by a deposit of the *share certificate.