Is there any reason why an ordinary partnership or individual can't secure debts by why of floating charge? Something to do with having unlimited liability?
Ask the Tutor ACCA LW
Floating Charge for Partnerships/Individuals
Maybe that's the reason - I've never been asked before but that could be it
With a company, liability of the members is limited so, on an insolventliquidation, there is a finite amount ofmoney available to settle the creditors' debts
Debentures provide the lending creditors with a degree of security
For individuals and partnerships there is (as you point out) no limit to the liability of those people
However, if a person is declared bankrupt with not sufficient assets to repay their debts, the concept of a debt secured by way of floating charge would seem to be not inappropriate
But, whatever I think, it's still not available for individuals and partnerships to secure their debts by way of floating charge security
Ok?
Seems logical, thank you.
You're welcome
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