I

1 Fix
Types of charges
It's:& Eieic charge
Dec18, Q3, part b It is a binding
liability to pay laid upon a particular asset
The charge sticks to particular asset until the charge is satisfied , .

Jun16, Q3, part b If the asset is transferred the charge follows it ,

.

June15, Q2, part b The co is not at liberty to deal w/ the charged assets
. .

The co is prevented -

frm dealing freely w/ that property w/o prior

agreement of the holder of the charge .

2 Floating charge
May be created over the co 's presents future assets
Is a charge on a class 1 group of assets ,
rather than specific
asset . For eg : a co .

may charge its stock in trade .

Jan18, Q3, part b While the floating charge remains un crystallised the co
,
. is at

liberty to deal w/ the assets .

Thus , may sell S replenish part of
the charged asset .

The floating charged does not follow the charged assets when

transferred .

When a
floating charge is crystallised ,
it affectscharged all assets
under it S these assets are subject to a fixed charged .

Differences Fix#rgeFohgChcge

Of
between fixed Mortgage of one 1 more specific Mortgage of some tall of the co 's
charge &

::÷÷÷:÷÷÷:÷:÷÷÷÷::n
floating charge
:÷÷÷÷¥
June14, Q7, part a .ie#i::::i:::::::::.f::i::i
freely w/ that property w/o prior un crystallised ,
the co . is at liberty
agreement of the holder of the to deal w/ the assets Thus
.
,
may
charge sells replenish part of the

chargec.la#

Person er charges on the co or

by any
responsible to ¥399 7h45
"
suffering
register a charge

\
\ But there
, if is a failure to register a charge , it is the co s every
Office of the co . Who is in default who must pay the penalty
Dec18, Q3, part b Thus ,
there is a practical obligation on the part of the borrowing co .

to register the charge .

O
Effects of

:* .in#::n:::i:i::::i:ii:.:::::::::n:::i ::: :: : : : : : : :c:c: : : :

E
failure to
register a
-

charge
become immediately payable
Dec18, Q3, part b Thus avoid debt
June18, Q3, part b , failure to
register a charge does not the as btwn the
borrowing S the whose the charge is made
June15, Q2, part b co .
person favour

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 ↳
Nature of charge
& its purpose
Charge include
charge / mortgage
a mortgage

upon
s any
demand
agreement to give 1 execute a
tother wise
June15, Q7, part a There will be a charge where a co transfer the property in its goods to
.

another as a surety for payment of debts owed by the co to that .

person .

A charge does not title

pass

The charge must be registered with the Registrar within 30 days

of its creation
Procedure of
registering By filing statement of Particulars to be lodged w/ Charge
charge
iioeeiihiisiiirfiiiiiiiisei.se#eiiiiiiiieiirticiisii :# charge as
June15, Q2, part b confirmation that each has been registered
charge
The Registrar S the creating the charge 1 copies thereof
instrument
must be opened for inspection by any creditors S shareholders free
of charges by any other person on
payment of a fee .

Crystallisation of floating charge is when there is a default in

payment of interest 1 repayment of the principal sum , where it

Explain becomes a fixed equitable charge

“Crystallisation of Events that may cause crystallisation :

floating charge &

events that may
÷÷÷i÷÷÷÷:÷÷÷ : :S "÷÷÷ : iii.
cause
crystallisation
: me . . takeover .
-
neon arsed
assets
i v) when the creditor take steps to take the
June18, Q3, part b enforce possession of
Dec16, Q9, part a charged assets
v ) If the instrument charge provides the charge crystallised at the
of

option of the creditors the creditor give notice under such clause
Vi ) If the instrument of charge provides such event that triggers the

crystallisation of the floating charge

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 D
Disadvantages
Iii 's :c'T : ' other : : ii. sins;
' "
of floating 's coins safari
.in seen .to?:nite::eates
charge
Low priority given to a floating charge holder when distributing
June18, Q3, part b the proceeds of insolvent liquidation

Time period, The charge must be registered with the Registrar within 30 days
documents, fees & '
type of register book
¥I÷÷÷÷
:* : : nisus : : :*:c.im
" " "
to be maintained for in :* two :L
registration of charges
The Registrar will issue certificate of Registration charge as

confirmation that each charge has been registered

June18, Q3, part b
The Registrar S the instrument creating the charge 1 copies thereof
must be opened for inspection by any creditors S shareholders free
of charges by any other person on
payment of a fee .

Types of
debentures
-1-1 Mortgage debentures
secured on the property of the co . either in the form of floating
June18, Q3, part b charge la fixed charge I both floating S fixed charge

f.
-
2 Convertible debentures
" ma

÷÷÷÷÷÷÷÷÷¥±÷÷ : : :* : : : :* : :* .ie
. .
into no

Issued with a fixed date fr redemption are redeemed within a

specified period
-
4 Simple In a keel debentures
Issued w/o security s they are usually known as bonds
on
winding up the holders would rank w/ unsecured creditors

D
,

Circumstances
where issuance
of mortgage
debentures is
¥ :÷÷÷:÷÷÷:÷÷÷::÷÷÷÷ :P : .si#sixii:::::isniixnieina .
.
be available especially if the
preferred than ,

issuance of new share market was depressed 1 price volatility

shares During the period of bear market .

Jan18, Q3, part b Whereby ,

bear market reminds the investors of the virtues of
Jun16, Q3, part b a bond 's
safety S stability .

June15, Q2, part b

-

Shares Debentures
VOFgrightntitetovoteatgenerameeh.gov#ghts
Winding up Not entitled to be repaid the value Entitled to be repaid the nominal

r.n.f.it:1#::::::::i::::::f::n::::s
Returnstivedendfrmthecoisann unprofitability
Status shares represents part of ownership Debentures are creditors of the co .

0fC#
Jan18, Q3, part
June15, Q2, part b
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