Study On Floating Charge

Floating charge is a special system of insurance, which develops from the judicial practice of the Delaware Chancery Court. The guarantor is not only allowed to possess the guaranteed property, but is also vested the right to dispose of guaranteed property in daily operation. Compared with the fixed charge, Floating charge is better to keep the capability of management of the guarantor and thoroughly implement the civil principle of making the best use of everything, which is already accepted by many countries."Real Right Law of the People's Republic of China" has prescribed this system in the chapter of "Mortgage". The main purpose of this thesis is to give some advice to make Floating charge operated more effectively in our country by analysing and discussing the advantages and disadvantages of it.The thesis consists of introduction, body and conclusion. By using comparative analysis, the thesis makes a general introduction about the floating charge in terms of its basic theory and practical application.The first chapter is about the features and position of Floating charge, where the background of the term is illuminated. The fundamental difference between Floating charge and Fixed charge will be pointed out and the concept and features of Floating charge will be made clear by explaining the definition of Floating charge given by the Anglo-American Law System. And the position of Floating charge in legal system is defined through analysing the relationship between the Floating charge and the Mortgage.The second chapter is the analysis of advantages and disadvantages of the Floating charge. The unique function of Floating charge is analysed in this chapter and the conclusion is made that the system fits in with the need of the economic development of our country. Meanwhile, a risk analysis of Floating charge system is made, and the deficiencies of risk reduction prescribed by Real Right Law of China are pointed out.The third chapter is about an overview of Floating charge of British and American. A comparative analysis is made through horizontally analysing the operation mechanism of Floating charge in British and American, which may serve as a source of reference for optimizing the same system in China.The forth chapter concerns reconstructing the Floating charge system of China. Based on discussions made in the first three chapters and the actual demands of our country, Suggestions will be made in the hope of optimizing the Floating charge system in China in terms of legal system, operational mechanisms and supporting institution.