On The Perfection Of Our Country's Regulation On Floating Charge

Floating charge is the original creation of British equity law.The concept of it can be understood from the rights and obligations of the creditor and the debtor.From the perspective of the creditor,the creditor is entitled the rights to immobilize the charge in case of the improper operation of the debtor,and at the same time not to interfere the normal operation of the debtor. From the perspective of the debtor,the debtor enjoys the management right on the charged property,and at the same time undertakes the obligation to dispose the charged property only in the normal operation of business.Floating charge has two main characteristics as the free disposal of the charged property in the normal operation of business and the distinctive receiver system.Different from mortgage,corporate security,entrust,cession security and the consortium guarantee,floating charge has the advantages of the exertion of the scale effect of the enterprise, the maintenance of the normal operation of enterprise and the convenience in registration,as well as the limitations as the difficultly in ascertaining of the value of charged property,the insufficient in protection of the creditor and the defect to the debtor caused by the facile crystal. The floating charge system has a perfect operation system which can be summarized respectively as set-up,dormancy and achievement stage.The People's Republic of China's Property Law(Property Law for short) prescribes the floating charge of the moveable property,which symbolizes that our country's legislation on security system is developed towards a more scientific and modern trend.But while the complicated system was being introduced to our property law,it shows that only the floating charge of moveable property is recognized by Chinese law and because of the regulation on floating charge lacks sufficient countermeasure that the practical application of it is difficult.It can be improved from the following five aspects:first,to enlarge the object of the floating charge to intangible property and real property;second,to perfect the registration system on floating charge both from procedural and substantive aspect;third,to enlarge the protection of the creditor by supplement of the "normal business coverage" and the rights of the creditor; fourth,to introduce the receiver system and the priority system;fifth,to set up the credit system and to avoid the occurrence of "cheating in loan and charge".Through the implementation of the above measures,the floating charge system can be really the one suitable to our country's reality.