Study Of A Floating Charge System

Floating charge system is a kind of new guarantee established in U.K case law gradually, which had broken the imprisonment of traditional concept. This kind of guarantee is allowed to set up on the future property, and the mortgager is given the right to operate the business as usual, it can exert the maximize use of the limited asset. Floating charge system adapts the development of market economic because of its powerful financing function and flexibility, and has been popular in many countries.Now, China is in a period of rapid economic development, especially joined in the WTO, the economic contact between countries become more closely, a large number of medium or small enterprises' demand for capital expanded rapidly, and our former "Guarantee Law" has been unable to meet the financing needs of enterprises. In this background, China introduced the floating charge system in "Property Law" on March 16, 2007. Because of our floating charge system is different from other countries in the main body, the scope of guaranty. the procedure of realization and so on, it solicited many criticisms from our academia, then how to understand and how to apply the system become the focus of theory circle and practice circle. So this thesis will discuss our countries' floating charge system, and give some personal suggestion on its deficiencies.The thesis is consisted of four parts.The first part is the basic theory about floating charge. By comparing the different concept in common law and civil law, we can know that floating charge is a kind of mortgage, which mortgager can set up on his present or future, all or part asset, while still keep his right to dispose the pawn during business, and the mortgagee have the priority to realize his interest when the statutory or appointed conditions happened. Its characters are: the floating nature of guaranty, the mortgager's right to dispose the guaranty, can be transformed; floating charge and the consortium charge have similar characteristics, but they also have very clear distinctions, they are different in nature, the scope of the subject matter, the mortgagers' right, the way to set up and the priorities effective; compare with other countries' regulation about the floating charge, our regulation is different with theirs in the mortgager, the scope of the guaranty and the procedure of realization, so it caused the debate on the nature of the Article 181 of "the property law"; the floating charge have irreplaceable advantages, but also there are inevitable limitations.The second part is about the establishment of the floating charge. In defining the scope of the mortgagor, almost countries generally made a restrictions to prevent the risks, while our scope of the mortgager is more boarder, including enterprise, individual businesses and agricultural production operators, although there are a lot of f controversy, but our purpose of legislation is to meet the small and medium enterprises and farmers financing needs, so the author figured that our regulation on mortgager is reasonable; on the scope of guaranty, the "property law" limited it on part movable property, the author suggest that we should expand its scope to all kind of movable property, immaterial assets and intellectual property and so on.The third part is about the effectiveness of floating charge. This part mainly expound the effect of the floating charge rights to the guaranty, to the secured creditor, to the secured parties; and define the scope of "normal operations", the author think that our legislation can take the reverse list means, list some non-normal operations to prevent the guarantor abuse his right, at the same time give judges the discretionary power to determine mortgagors' conduct; make recommendation in the protection of the interests of creditors, suggested that should give the creditor the supervision right, and the revocation right in special circumstance; discuss the principle when the floating charge right coexist with other rights.The fourth part is the realization of floating charge. In this section, the author discussed the conditions the floating charge transformed into fix charge in comparative angle, as well as the procedure of the mortgage realization. Analyses the unique receiver system of British floating charge, and I don't think its suitable for our situation, so the author suggest that we can draw lessons from the receivership in the realization procedure, and establish our own supervisor system which have no management and administrative right, when the crystallization causes happened, the mortgagee can give notice to the mortgagor, in order to prevent malicious loss of property, mortgagee can appoint supervisor to control encumbered property effectively.