Business charge: pledging assets as security

A business charge (virksomhedspant) is one of the most important financing tools for Danish companies. It makes it possible to provide a broad range of business assets as security for loans and is in many cases the decisive key to obtaining bank financing or an operating credit.

Even so, the business charge is unknown to many entrepreneurs and smaller business owners who have not dealt with business financing. This guide explains what a business charge is, what can be pledged, and what the chargeholder's rights involve.

What is a business charge?

A business charge (in English a floating charge) is a pledge that rests on a collective pool of the company's assets rather than a single, individual asset. The subject of the charge is a "floating pool" of assets that can vary over time but is at all times subject to the charge.

The business charge is governed by section 47c of the Registration of Property Act.

What distinguishes a business charge from other forms of pledge?

Form of pledge	Subject	Example
Registered charge on real property	Specific real property	Home loan, business mortgage
Pledge with possession	Specific movable handed over	Pledge of shares
Non-possessory charge on movables	Specific movable stays with the pledgor	Charge on machines, vehicles
Business charge	Floating pool of assets	Stock, receivables and operating equipment

The strength of the business charge is its flexibility: it covers assets that change (stock is sold, new receivables arise) without the charge having to be registered anew for each individual asset.

What can be included in a business charge?

Section 47c(3) of the Registration of Property Act states which asset types can be included in a business charge.

Assets that can be included:

• Movables intended for business use (machines, operating equipment, production equipment)
• Stock and raw materials
• Simple receivables (amounts owed by customers)
• Goodwill and certain intellectual property rights
• Commercial tenancy rights

Assets that cannot be included:

• Real property (requires a registered mortgage on the property)
• Shares in companies (require a possessory pledge or other security)
• Assets already pledged by a separate registered charge
• Certain types of financial assets

Registration of a business charge

For a business charge to be valid against third parties (including other creditors and in bankruptcy), it must be registered in the Register of Persons (Personbogen).

The registration process

1. The agreement is entered into: the pledgor and chargeholder enter into a charge agreement (typically an owner's mortgage deed or an indemnity deed)
2. Digital registration: the charge is registered digitally via tinglysning.dk with MitID
3. Priority is fixed: priority is determined by the time of registration, so the first registered right has the best priority
4. Registration duty: a registration duty is paid (see below)

Publicity

The registration of a business charge is public and can be searched in the Register of Persons. Banks and other creditors typically check the register before granting credit.

Registration duty

For the registration of a charge, other than a statutory charge, the duty is a fixed duty of DKK 1,850 (2026) plus a variable duty of 1.5% of the secured amount. A business charge with a charge sum of DKK 1 million therefore costs DKK 1,850 + DKK 15,000 = DKK 16,850 in registration duty.

Note that the reduction of the variable duty from 1.45% to 1.25% that took effect on 1 January 2026 applies only to charges on real property and cooperative homes, not to business charges.

The charge agreement: what should it contain?

A business charge agreement should contain:

1. The parties' identification

The pledgor (the company's full name and CVR) and the chargeholder (the bank's or creditor's name and identification).

2. The charge sum

The maximum amount the charge secures. Note that the charge sum is not the same as the current loan but the maximum claim the charge can cover, including interest, fees and costs.

3. The subject of the charge

A description of the asset types included in the charge, with reference to the categories in section 47c(3) of the Registration of Property Act.

4. The secured claim

Which loan, credit or obligation does the charge secure? Is it a particular overdraft or loan, or does the charge secure all current and future claims from the chargeholder?

5. The pledgor's obligations

• To maintain the assets in good condition
• To limit the sale of the assets to what is part of normal operations (ordinary sale of goods is allowed)
• To notify the chargeholder of significant changes in the asset pool
• To insure the pledged assets

6. The chargeholder's rights on default

If the pledgor defaults on the underlying loan, the chargeholder can enforce the charge and seek satisfaction in the assets, if necessary through the enforcement court and by a realisation of the charge.

Business charge and bankruptcy

In bankruptcy, the business chargeholder as a rule has a prioritised (separatist) right to the pledged assets, but the priority is not unconditional:

• Wage privilege: employees' wage and holiday-pay claims are privileged claims in the order of bankruptcy (section 95 of the Bankruptcy Act) and enjoy special protection, which under the rules can rank ahead of the business charge to a certain extent.
• Avoidance: a business charge registered for already existing (older) debt later than 3 months before the cut-off date can be set aside (avoided) under the rules of the Bankruptcy Act.

Business charge in practice

Bank loans and business credit: by far the most business charges are registered in favour of banks. An overdraft to a production company is typically secured by a business charge on stock and receivables.

Supplier credit: a large supplier can require a business charge as security for deferred payment on large deliveries.

Alternative financing: factoring (the sale of receivables) and asset-based lending are based precisely on the company's assets, and here the business charge is the typical security instrument.

Business charge for entrepreneurs and smaller companies

For newly established companies with limited equity, the business charge is often a central route to bank financing: the bank requires security, the company has no real property to pledge, and the company can instead provide a business charge on stock, machines and receivables. Note, however, that banks often also require a personal surety from the owner.

Frequently asked questions about business charges

Does it cost anything to register a business charge?

Yes. The duty is a fixed duty of DKK 1,850 (2026) plus 1.5% of the charge sum. A business charge of DKK 1 million therefore costs DKK 16,850 in registration duty.

Can we have a business charge in favour of several chargeholders?

Yes. The company can register a business charge in favour of several chargeholders. Priority is determined by the time of registration, so the first registered right has the best priority.

Must all the company's assets be included?

No. The business charge can be limited to certain asset types, for example only stock and receivables.

What happens to the business charge if we sell the company?

The underlying loan as a rule has to be repaid, and the charge cancelled, before the company is transferred. Alternatively, a new owner can take over the debt, but this requires the chargeholder's consent.

Is a business charge the same as a surety?

No. A surety is a personal liability, where the surety pays if the debtor cannot. A business charge is a charge over property, where the chargeholder's right is in the assets, not in a person's personal wealth.

Conclusion

A business charge is an effective financing tool that allows companies to provide assets as security without transferring ownership. It is essential that the agreement is correctly drawn up and registered for the charge to be valid against third parties. The registration of a business charge should be done with professional assistance.

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The content of this article is for guidance only and does not constitute legal advice. Consult a business lawyer or your bank for advice on a business charge in your specific situation.