Legal Regulation Of Normal Business Operation In Floating Charge

The system of the Floating Charge was stipulated in China’s Property Law issued in2007.In Floating Charge, the mortgage property is uncertain and floating unless in case of realizing mortgage rights and the mortgagor has the right to dispose the property during the mortgage term. Purchaser will not be restricted by the mortgage rights in normal business operation."Normal Business Operation" in Floating Charge has its legitimacy in that it restricts the free disposition right of the mortgagor, better realizes the value of mortgage property so that marketing resources could be re-allocated reasonably and interest relationship balanced between the both parties concerned. But at the same time,"Normal Business Operation", as an exception to mortgagor’s rights, has great impact on the rights of the third party and mortgagee. The law in China doesn’t regard the "Normal Business Operation" as special regime, with only one directly related term, basically is some frame rules, so the system is too simple and lack of clear definition and relative measures. It leads to arbitrariness of the mortgagor behavior and disputes easily. Therefore, it is necessary to study and draw lessons from system model of the Britain and American, whose definition of "Normal Business Operation" is clearly identified and mature related system set, to inspect legal environment and the features of "Normal Business Operation" in China, and further improve its legal regulations.This article, based on comparative research to discuss the legitimacy, legislation and legal defects of "Normal Business Operation", put forward some suggestions to perfect "Normal Business Operation" regime and to protect the interests of parties concerned.Apart from the introduction and conclusion, the article includes the following three chapters:Chapter one gives a general illustration of "Normal Business Operation" principle in Floating Charge. This section describes and refers to both regulations and scholars’ viewpoint of "Normal Business Operation" in Anglo-American and domestic law system, and then combines with China’s regular operation under the legislation and social status to explicitly define the concept and scope of "Normal Business Operation". It presents the relevant provisions of "Normal Business Operation" in China’s Property Law, and deeply clarifies the understanding of "Normal Business Operation" in Floating Charge.Chapter two analyzes the legal rules of "Normal Business Operation" and discusses the problems existed in "Normal Business Operation" of Floating Charge in China. In this section, the author first describes the legislation actuality of "Normal Business Operation" system and its legitimacy, and then focuses on its legal defects in China.Chapter three mainly expounds the improvement of the "Normal Business Operation" regime. This one refers to the sound legal system of the Britain and America and put forward a series of suggestions for improvement of the "Normal Business Operation" in China’s Floating Charge.