Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Floating charge definition

What does Floating charge mean? A floating charge is a security interest over a changing pool of assets (present and future) that the chargor may deal with in the ordinary course of business until the charge fixes to those assets. It is typically granted by companies or LLPs under an all‑assets debenture. In England & Wales and Northern Ireland its key features are developed by case law and statute: the charge “crystallises” on agreed or insolvency events and then operates like a fixed charge over the assets then subject to it. In Scotland, floating charges exist only by statute and “attach” on specified...

Floating charges in Scotland and England: creation and structure (including English debentures), enforcement (crystallisation v attachment) and registration, including ranking/intercreditor alterations

Published by a LexisNexis Banking & Finance expert

Practice notes

Once hailed as a demonstration of the English knack for bending the most rarefied ideas to commercial ends, Floating charges are now widespread and, in practice, almost indispensable to finance deals. This Practice Note flags the key distinctions between the laws of Scotland and England concerning floating charges, looking in particular at their make-up, the rules on registration, and the mechanisms for enforcement in each jurisdiction. It concentrates on the status of a ‘qualifying floating charge’ as that expression is defined in the Insolvency Act 1986 (IA 1986), and how the concept operates across both Scotland and England.

The floating charge

Although fixed securities give a lender priority ahead of floating charge holders and unsecured creditors, they are confined to the identified asset over which they are granted and limit the borrower’s freedom to deal with that asset without the fixed security holder’s consent. Because of this narrow ambit and restrictive character, fixed charges are not apt for many asset classes—particularly those that circulate regularly, such as stock. Even so, those categories of asset may still embody significant value...

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Web page updated on 21/05/2026

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