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Commercial Security Agreement for the United Kingdom

Commercial Security Agreement Template for England and Wales

A Commercial Security Agreement under English and Welsh law is a legally binding document that creates a security interest over specified assets in favor of a secured party. It sets out the terms under which assets are pledged as collateral to secure the performance of obligations, typically loan repayment. The agreement includes detailed provisions on the nature of the security, rights and obligations of parties, enforcement mechanisms, and requirements for perfection under English law.

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What is a Commercial Security Agreement?

A Commercial Security Agreement is essential in secured lending transactions where assets are provided as collateral. Under English and Welsh law, this document establishes the security provider's grant of security interests over specified assets to the security taker, typically to secure repayment of a loan or performance of other obligations. The agreement must comply with specific requirements for creating valid and enforceable security interests, including registration at Companies House where applicable. It contains detailed provisions on the secured assets, representations and warranties, covenants, and enforcement rights.

What sections should be included in a Commercial Security Agreement?

1. Parties: Identification and details of the security provider and security taker

2. Background: Context of the security arrangement and underlying obligations

3. Definitions: Key terms used throughout the agreement

4. Grant of Security: Core security creation provisions including the type and nature of security interest being created

5. Secured Assets: Detailed description of all assets subject to security interest

6. Secured Obligations: Definition and scope of obligations being secured under the agreement

7. Representations and Warranties: Security provider's confirmations regarding secured assets and capacity to grant security

8. Covenants: Ongoing obligations of the security provider regarding maintenance and dealing with secured assets

9. Enforcement: Rights and remedies available to the security taker upon default

What sections are optional to include in a Commercial Security Agreement?

1. Further Assurance: Additional provisions requiring the security provider to take actions necessary to perfect or protect the security

2. Power of Attorney: Provisions appointing the security taker as attorney of the security provider for enforcement purposes

3. Insurance: Requirements for maintaining insurance over secured assets and treatment of insurance proceeds

4. Assignment: Provisions governing the transfer or assignment of security interests to third parties

What schedules should be included in a Commercial Security Agreement?

1. Schedule 1 - Secured Assets: Detailed inventory and description of all assets subject to the security interest

2. Schedule 2 - Forms of Notice: Template notices for notifying third parties of the security interest

3. Schedule 3 - Rights and Remedies: Detailed provisions regarding enforcement rights and procedures

4. Schedule 4 - Perfection Requirements: List of specific actions required to perfect the security interest in different types of assets

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Publisher

Ƶ

Document Type

Security Agreement

Cost

Free to use
Relevant legal definitions




































Clauses



































Industries

Companies Act 2006: Primary legislation governing company charges, registration requirements, and creation of security interests. Key for corporate security arrangements and registration of charges at Companies House.

Law of Property Act 1925: Fundamental legislation concerning real property security, including requirements for creation of legal mortgages and charges over land and property.

Financial Collateral Arrangements (No.2) Regulations 2003: Regulations governing financial collateral and enforcement rights, with specific provisions for financial institutions and security arrangements involving financial assets.

Enterprise Act 2002: Legislation affecting the enforcement of security and containing restrictions on administrative receivership, impacting how security can be enforced.

Insolvency Act 1986: Critical legislation determining priority of creditors and the effect of insolvency on security interests, including rules on administration and liquidation.

Consumer Credit Act 1974: Legislation governing consumer credit arrangements, relevant if the security agreement has any consumer-facing aspects.

Bills of Sale Acts 1878 and 1882: Historical legislation still relevant for security over certain types of personal property, particularly important for non-corporate borrowers.

Financial Services and Markets Act 2000: Regulatory framework for financial services, relevant when security arrangements involve regulated financial services or institutions.

Common Law Principles: Body of case law and equitable principles governing security interests, including rules on perfection, priority, and contractual interpretation.

Registration Requirements: Mandatory registration obligations at Companies House and/or Land Registry, depending on the type of security and assets involved.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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