Fixed and floating company charges

A fixed charge generally restricts the company’s freedom to dispose of or otherwise deal with the charged asset or its proceeds without the chargeholder’s consent; the company may still use an asset in its business under the terms. A floating charge typically covers a changing class of assets which the company may deal with in the ordinary course of business until crystallisation or other intervention. The legal substance and actual permitted control matter, not merely the label in the document. Registration and insolvency-priority rules must be considered separately.