Floating Charge
- The Source
- Dec 26, 2024
- 1 min read
Updated: Apr 13
"A floating charge gives flexibility to the chargor (company) and the chargee (creditor). The company is free to deal with its assets in the ordinary course of business and the chargee (creditor) is protected when a “crystallising event” [...] takes place. A floating charge has three elements;
- it is a charge on a class of the assets of a company, present and future,
- the class of assets may change from time to time, and
- the company may carry on business without restrictions until action is taken by the chargee (creditor).
[...] A further advantage of a floating charge is that it allows the charge (creditor) to appoint a receiver and to sell the business as a going concern without the need for court involvement".
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