Study Of A Floating Charge System

Floating charge is a guarantee system from the equity law of England. It was established in 19^th century.The system has been introduced in many countries of common law system and some countries of the continental law system such as Netherlands,Norway,Russia and Japan as well.Floating charge system breaks the limit guarantee scope of the traditional fixed mortgage of continental law system,and extends it from "existing property" to "future property".Another marked feature is that the mortgaged property was not particular,the mortgager may freely dispose the mortgaged property to some extent,and realize the efficiency of floating charge.Therefore,floating charge plays an important role in enterprise financing,and gains big favors in international commercial credit.In the processes of the market economical development,the functions of modern security interest have been changed from damage saving to financing medium.Meanwhile,the multiplicity of credit business and the wide adoption of project financing make floating charge more practicable.China introduced the floating charge system in the Real Law in Mar,2007.But the provisions of mortgage in the law are too simple to meet the requirements of practice.Therefore,for the purpose of having a clear recognition of the advantages and disadvantages of the functions of floating charge,the thesis expatiates on the academic bases and legislation practices of floating charge,and makes suggestion to improve china's floating charge system.Apart from the introduction and epilogue,the thesis consists of four parts.The first part elaborates the concept and legal character of floating charge.As a special security interest,floating charge has four features, floatability and fluidity,aggregation,quality transferability,disposal freedom of mortgager.Secondly,the chapter compares the floating charge with group mortgage,the subrogation of mortgage and the maximum-amount mortgage to avoid the confusion of these concepts.The second part elaborates the general function of floating charge.As a special mortgage system,floating charge sets a special rights and obligations relation which is different from the common security among mortgager,mortgagee and the third party.The floatability of the guaranty increased the risk of the creditor,and the management ability and credit of debtor will influence the realization of hypothec.Therefore,the traditional floating charge system made an elaborate design in the establishment and register of floating charge,the right and limit of disposal of mortgager,the implement and payment sequence of floating charge etc.The third part compares the legislation of floating charge system of different countries,especially the regulation experiences of floating charge in England,Scotland,America,and the part also introduces the experiences of the written law countries in transplanting and referencing the floating charge.Through the researches on legislative practice of various countries, the writer comes up with two conclusions.Firstly,though the mode of Scotland develops in the modern time,but it inherited the particularity of the England mode,and also has the features of written law,so it is the most advanced mode.Undoubtedly,the Scotland law is the best example for china to make the future floating charge system.Secondly,Japan established fixed and floated Mortgage system preferably.Thus it can be seen,it's valid for china to establish floated mortgage system in the Real Law. The fourth part analyzes the existing defects of floating charge in the Real Law of china.Firstly,the subjects of floating charge are too wide. Secondly,the scopes of the guaranty are too narrow.Thirdly,the provisions to restrict the disposal right of mortgager are inadequate.Fourthly,the special provisions to implement the floating charge are lacking.Fifthly,the prescriptions of the payment sequence of floating charge are lacking.So we should improve our floating charge system in below ways:1) Perfect the credit mechanism,ensure the floating charge is available to each subjects.2) Make the reasonable restriction to the free disposal right of the mortgagers.3) Endow the mortgagers the right to protect their interests.4) Perfect the register and public trust system.5) Add the special provisions to the implement of floating charge.Finally,the epilogue puts forward the conclusions.Although china's Real Law introduced the floating charge system openly,but only the elaborately designed system can instill the fresh vigor to Chinese economy. Therefore,people in the filed of legal must consider how to regulate the floating charge in the way of legal technique,and make it works smoothly in the practice.