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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?
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
Seems logical, thank you.