Most PE diligence still starts in the same place: last signed accounts, latest management pack, a debt schedule that ties. If the balance sheet shows no bank loan, the room relaxes. Then somebody opens Companies House and finds a charge from 2006 sitting there like a bad smell that never got a window opened.
The accounts can be right. The public record can still be wrong. A buyer, a bank, or a new director will treat the register as the truth. That is the point of a public register.
The gap nobody puts in the data room index
A charge on the register is not the same thing as a loan on the balance sheet. One is a legal security interest recorded at Companies House. The other is an accounting residual. They are supposed to move together. In owner-managed groups, hall companies, old family holdcos and plenty of otherwise tidy PE portcos, they do not.
The usual story is boring, which is why it survives. The facility was repaid. The refinance completed. The overdraft died with the old bank. Nobody filed the satisfaction. Ten years later the directors have changed, the auditors have changed, and the only person who remembers the original completion file is retired. The Companies Act 2006 Part 25 charge regime does not auto-clean itself because your cash account looks healthy.
Why a dead loan still looks alive
Since April 2013, most UK company charges go on with form MR01. Getting them off is a separate act: a statement of satisfaction, MR04, in full or in part. If the company no longer owns the charged property, that is a different filing. None of this happens because the loan note hit zero in the TB.
Older all-monies bank charges are worse. They were often taken as a standing security over “everything we might ever owe you”, then left in place through three refinances and a change of clearing bank. The debt is gone. The public footprint is not. Credit reference agencies and some KYC shops still read the register, not your verbal history of the relationship.
There is no useful statute of limitations that makes an unsatisfied charge evaporate. It sits. It ages. It looks like a problem to anyone who was not in the room when the cheque cleared.
What a buyer, a bank, or a new director actually sees
A new director doing even a light personal check will see outstanding charges and no matching liability. That is not a trivia question. It is the first test of whether finance knows the difference between the books and the public record. If you are asking someone to take a board seat, do not make them discover this on a Sunday night.
A buyer’s counsel will not accept “everyone knows that one is historic.” They will want the lender’s confirmation and the satisfaction filed, or a clean explanation that survives a completion checklist. A debt fund doing holdco diligence will ask the same question in a worse tone.
This is also why “the accounts are clean” is not a diligence conclusion. It is a starting position. I have written before about what the interim CFO job actually is. It is not to decorate a data room. It is to make the public record, the bank, and the pack tell the same story before somebody else notices they do not.
The twenty-minute test
Before you take a board seat, buy a book, or sign a completion agenda, do this:
1. Pull the company on Find and update company information. Open charges. Note created date, chargees, and whether satisfaction has been filed.
2. Put that list next to the last filed accounts — creditors notes, contingent liabilities, security disclosures — and the current debt schedule.
3. Anything on the register with no loan line is not a mystery. It is an open item. Either the books are missing a liability, or the register is missing a satisfaction. Both are finance problems. Only one of them is usually true. You still have to prove which.
4. If the chargee still exists, ask for written confirmation the facility is gone. Then file. If the chargee has been through three mergers and a name change, that is a research job, not a reason to leave it.
Twenty minutes. Sometimes twenty days if the old bank has to find a deed. Either way, do not discover it in week six of a 100-day plan.
File the satisfaction. Then stop calling it historic.
Companies House is not being difficult. It will record what you file. The event-driven filing rules exist because the register is used by people who do not have your shared drive. An unpaid historic charge is not a vibe. It is an unfiled event.
If you are the CFO, this is a control, not a tidy-up. Put “CH charges vs debt schedule” in the monthly close pack until the list is nil or explained. If you are the incoming interim, do it in week one, before you start talking about systems, AI, or the covenant case. A model that cannot see an unsatisfied charge is not intelligence. It is a very fast way to reprint the same gap.
I am not giving legal advice. Get counsel on anything with a live lender, a disputed repayment, or property still sitting in the security pool. The operational point stands without a QC: the public record will be treated as true until you change it.
The PE tell
Houses that actually underwrite operations will ask for the charges print on day one. Houses that buy a narrative will notice it when the lawyers do, which is later and more expensive. If your AI stack, your QofE, and your board pack all missed a 2006 charge that outlived the loan, the problem was not the charge. The problem was the definition of done.
Clean accounts are necessary. They are not sufficient. File the satisfaction. Then the story you are telling investors is the same story Companies House is telling strangers.
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