Distinguish between a Fixed Charge and a Floating Charge

      

Distinguish between a Fixed Charge and a Floating Charge

  

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Martin
Fixed Charge

-This is a legal or specific charge. It is a charge securing a debenture on a fixed asset. In Illingworth v Houlds worth it was observed that a fixed charge is specific. The security is certain or capable of being ascertained.

Floating Charge

-This is a charge securing a debenture by the assets of a going concern. In Illingworth vHoulds worth, it was observed that a floating charge is ambulatory and shifting in its nature. In re Yorkshire wool Combers Association, Romer J. set out the characteristics of a floating charge:
- It is a charge on a class of assets of the company both present and future.
- The class of assets must be one that keep on changing from time to time in the ordinary course of business of the company.
- The charge remains dormant until crystallization
marto answered the question on February 6, 2019 at 05:33


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