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Hi Mike.
The notes where that ‘where there is a fixed and floating charge on a property’…
why would there be a floating charge on a property? isnt the nature of a floating charge such that it is not fixed onto any asset?
thank you.
Mike it is ok, I think i have found the answer:
“floating charge- liability to a creditor which relates to the company’s assets as a whole and may become fixed in particular circumstances (such as liquidation).”
(via Google search)
Mike, may i ask another question instead? in the notes where debentures are compared to shares, it says “Security ( not always )”. could you explain what is meant by this?
thank you.
Debentures – classically – are supported by being secured either on individual assets of a long-term nature (fixed charges) or on assets generally (floating charges)
However, it is not a requirement that debentures must have the support of secured assets
So a company may borrow money WITHOUT pledging ANY assets as security
Thus the course notes that say “Security ( not always )”
Ok
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