Nokia
Chapter 15
COMPANY SECURITIES
15.1 DEBENTURES
This is a written acknowledgement of a debt owed by a company. Whilst it is possible for some debentures to be unsecured, those given to the bank will usually incorporate a fixed and / or a floating charge over the company's assets.
15.2 FIXED CHARGE
This is a charge which immediately encumbers specific assets of the company. Accordingly, the chargee's (bank) consent would be required if the company is to deal with or dispose the assets charged. It usually attaches fixed assets such as land, plant and machinery, fixtures and fittings.
The fixed charge may be either be a legal or an equitable charge but if future assets are to attached it would be necessary for the charge to be equitable. It was held in Seibe Gorman & Co. v Barclays Bank that a fixed equitable charge may attach the future book debts owed to the company provided:-
( The company is restricted in so far as assigning or factoring the debts without consent, and
( The money received from the debtors must be placed into an account nominated by the chargee (eg. bank). Because of this clause, the company may not open an account with another bank without your express consent.
If the above are not satisfied, the bank would have a floating charge over the debts Re: Brightliffe Ltd.
15.3 FLOATING CHARGE
This is usually a charge over the circulating assets of the company eg stock although a floating charge may also attach fixed assets. The floating charge is always an equitable charge.
The characteristics of a floating charge were outlined in Re: Yorkshire Woolcombers Association Ltd and they are:-
( It is a charge over present as well as future assets eg fixed and current assets;
( The assets caught are constantly changing in the ordinary course of business eg stock;
( Until the chargee (eg. bank) takes steps to enforce the charge, the company can continue to deal with the assets in the normal way.
When created, the
COMPANY SECURITIES
15.1 DEBENTURES
This is a written acknowledgement of a debt owed by a company. Whilst it is possible for some debentures to be unsecured, those given to the bank will usually incorporate a fixed and / or a floating charge over the company's assets.
15.2 FIXED CHARGE
This is a charge which immediately encumbers specific assets of the company. Accordingly, the chargee's (bank) consent would be required if the company is to deal with or dispose the assets charged. It usually attaches fixed assets such as land, plant and machinery, fixtures and fittings.
The fixed charge may be either be a legal or an equitable charge but if future assets are to attached it would be necessary for the charge to be equitable. It was held in Seibe Gorman & Co. v Barclays Bank that a fixed equitable charge may attach the future book debts owed to the company provided:-
( The company is restricted in so far as assigning or factoring the debts without consent, and
( The money received from the debtors must be placed into an account nominated by the chargee (eg. bank). Because of this clause, the company may not open an account with another bank without your express consent.
If the above are not satisfied, the bank would have a floating charge over the debts Re: Brightliffe Ltd.
15.3 FLOATING CHARGE
This is usually a charge over the circulating assets of the company eg stock although a floating charge may also attach fixed assets. The floating charge is always an equitable charge.
The characteristics of a floating charge were outlined in Re: Yorkshire Woolcombers Association Ltd and they are:-
( It is a charge over present as well as future assets eg fixed and current assets;
( The assets caught are constantly changing in the ordinary course of business eg stock;
( Until the chargee (eg. bank) takes steps to enforce the charge, the company can continue to deal with the assets in the normal way.
When created, the