A Study Of Floating Charge

A floating charge system was introduced on March 16,2007 by the "Troperty Law",it can give full play to value of the security of property owned by the enterprise, is a flexible and efficient form of financing guarantee which is conducive to resolving the current enterprises, especially Small and Medium Enterprises financing difficulties in China. Floating charge system Of "property law" built up by only three articles is imperfect, which is not conducive to practical applications and risk prevention, and can not to ensure the floating charge system to effectively implement in practice. This paper attempts to improve the system of floating charge thought some advices. Paper is divided into four parts:The first part is about the definition of the concept of floating charge. Floating charges originated in Roman law, and ultimately by the Court of Chancery in England in the form of precedent has been established, but also because of the historical background, only a description of the system without a clear definition. Many scholars in the study of this system make different definition, and I believe that the floating charge is based on all its existing and future all or part of the property the subject matter, the mortgaged property for sure, people floating charge right themselves within the normal scope of business dispose of the mortgaged property, when the specific reasons arise, the mortgaged property into a fixed charge. At the same time that the system has the following four characteristics:a collection of collateral, the variability of collateral, the conversion of floating charges and mortgages people the freedom to dispose of the collateral. In addition, the author floating charge and fixed charge, a maximum mortgage financial mortgage and a comparative study, that the system, although there are similarities with these three systems, but is different in nature, is a parallel relationship between them.The second part is about strengths and weaknesses of the floating charge system. Like any other systems, the floating charge system have its advantages and disadvantages. Its advantage lies not only help strengthen the financing capacity of companies and will not affect the freedom of their business on the mortgaged property, it is beneficial for the full and effective use of corporate assets, and promote healthy and stable development of enterprises; shortcomings is the weakening of the mortgagee and the protection of the legitimate interests of other creditors. In the "Property Law" is to see the introduction of floating charge system to its advantages of the system to meet the needs of economic and social development in China, but the specific requirements of the situation, the protection of the interests of creditors is not enough to increase the system running risks.The third part is about several problems in the process of the floating charge system. Floating charge floating charge is divided into three process:the creation,dormancy and achievement. In three stages above, there are all risks of operation of the floating charge. Stage in the creation of the encumbered subject to the restrictions accordingly; the same time to expand our floating charge in the range of the mortgaged property; but also to build a sound system of notification of registration. In the dormant stage, we have to define the scope of daily business activities, and that the mortgagor the exercise of freedom of disposition of property can not be beyond the scope of the time. I believe that the result in the realization phase crystallization of the floating charge has the following three cases of events:the loss of leading mortgage company continued viability of human, artificial control of the mortgage on the mortgaged property and the implementation of the provisions of behavior and floating charges; the same time that the floating charge security interest to achieve priority issues determined by the following two factors:First, other types of security interests; Second, whether the floating charge has some restrictive clauses and other security interest holder is aware of the existence of restrictive terms.The fourth part is about the Improving the System of floating charge. Based on the experience of other scholars and the actual situation in our country, the author make the following suggestions:First, limit the scope of floating charges for the human body corporate; secondly,expand the scope of the mortgaged property; thirdly, give the mortgagee the full floating rights; fourthly, clearly define the mortgagor's the range of "normal operation"; fifth is clear that realization of the right to pick a floating charge; Finally, improve the social credit and the related system of Public Registry.