A Guide to Doing Business in Scotland Loans & Security/Enforcement in Scotland

Person on laptop holding bank card

Bank loans

Bank loans are usually governed by a facility agreement which sets out the basic terms of the loan, such as interest payable, dates of repayment, financial covenants and numerous warranties and indemnities in relation to the position of the business. In Scotland, bank loans to companies are generally secured by means of a “bond and floating charge” and “standard securities” over any land owned by the company.

Different security is used in Scotland to secure different types of property. In Scotland, the security mechanisms typically used for commercial transactions are a standard security, floating charge, assignation in security and share pledge.


Taking a standard security (SS) is the only way to create fixed security over land and buildings in Scotland. It is a statutory creation, following a prescribed statutory form, and includes specific commercial terms of the document and various mandatory terms and standard conditions which apply to all standard securities.

It is also possible to create a floating charge over real estate in the same way as for other types of assets. In taking security over investment property, it is also common for a lender to take a separate assignation of the right to rents received from occupational tenants by way of an assignation of rents.

Floating charges

Floating charges are another mechanism broadly similar to that in England, including the Insolvency Act 1986 provisions in respect of administration (although different Insolvency Rules apply in Scotland).

The Law of Property Act has no application in Scotland, meaning LPA receivers are not recognised over Scottish property. Generally, a receiver cannot be appointed only to part of the assets charged by a FC; an administrator will need to be appointed where all assets are charged.

Share pledge

In order to create a fixed security right in Scotland, shares need to be transferred to the charge holder (or its nominee). The charger will sign a stock transfer form and the charge will be entered into the company’s register of members. The security is completely ineffective until the necessary transfer formalities have been carried out.

The share pledge document regulates the rights and obligations of the parties to the charged shares, both before and after enforcement. The security is completely ineffective until the necessary transfer formalities have been carried out. It is normal for voting and dividend rights to be retained by the charger by virtue of the share pledge until default (or another enforcement trigger event) has occurred.

Good to Know

It is important to note that taking security over property in Scotland is different from doing so in England. There is no concept of an equitable charge in Scotland and no distinction between a mortgage and a charge. There are also peculiarities in taking security over book debts, cash deposits and intellectual property rights in Scotland.

Our Awards & Accreditations

  • In 2016, we were one of the first law firms in Scotland to become accredited Living Wage employers.

  • Shortlisted for Firm of the Year at the Scottish Legal Awards 2022.

  • Winners of Corporate & Commercial Team of the Year and Family Law Team of the Year at the Scottish Legal Awards 2020.

  • Our Real Estate team won the Property Team of the Year Award at the British Legal Awards in 2018.

  • Winner of SME of the Year at the Scottish SME Awards 2017, hosted by Scottish Business Insider.

  • Highly Commended for Commercial Team of the Year at the British Legal Awards 2016.

  • In 2019, MacRoberts achieved Cyber Essentials Plus certification, a UK Government entry-level information security standard. 

  • MacRoberts holds the ISO 9001:2015 certification for Quality Management, the most widely recognised quality management system standard in the world.

  • Iso 14001 2015 Environmental Management

    MacRoberts holds the ISO14001:2015 certification for Environmental Management, demonstrating our ongoing commitment to environmental awareness.

  • MacRoberts holds the ISO27001:2013 certification for Information Security, an internationally recognised security gold standard.

  • Business continuity is a critical element of the Business Management System at MacRoberts and we hold full accreditation with the ISO 22301:2019.

  • MacRoberts is a member of IP Inclusive, a network of intellectual property professionals working to make our community more equal, diverse and inclusive.

  • We are active members of the PRIME Programme – an organisation that focuses on ensuring a career in law is open to talent from all economic and social backgrounds.

  • MacRoberts supports the Scottish Business Pledge, a values-led partnership between Government and business that is based on boosting productivity and competitiveness through fairness, equality and sustainable employment.

  • We are supporters of the Partnership for Change, a network of organisations and individuals who share a common ambition to improve diversity on boards and in senior leadership.

  • We are a member of the Employers Network for Equality & Inclusion (ENEI), a UK-based not-for-profit organisation which helps employers build and maintain diverse teams and inclusive cultures through our membership, training, and consultancy services.

  • MacRoberts was awarded enei's Silver TIDEMark for 2023. TIDE is enei's self-assessment evaluation and benchmarking tool which measures an organisation's overall approach and progress on diversity and inclusion.

  • MacRoberts is a Disability Confident employer, and are committed to disability equality across our firm.

  • MacRoberts fully supports flexible working practices and supports family-friendly working practices.

  • In 2022, MacRoberts received a Bronze Award in Stonewall's Workplace Equality Index for our commitment to LGBTQI+ inclusivity in the workplace.

  • MacRoberts is a longstanding member of Scotland Food & Drink, the leading trade association for Scotland's food and drink industry.

  • MacRoberts is an Associate Member of SELECT, Scotland's largest construction trade association.