floating charge

floating charge

a security created by a company by debenture (in Scotland, a floating charge) over its whole assets and undertaking for the time being. The point of this form of security is that the company may continue to conduct its business, disposing of some assets and acquiring others without having to obtain the consent of the debenture holders for each disposal. In the event of a default, the charge crystallizes and becomes fixed and enforceable over the assets held at that time.