| Commentary

14.3 Nature and priority of charge

| Commentary

14.3 Nature and priority of charge

Consideration must be given as to whether a debenture1 will be secured by a floating charge alone2, or whether specific legal charges are also required.

If a debenture provides that the charge is to constitute a floating security only, a restriction is sometimes added on the company’s right to create any mortgage or charge upon the property comprised in the security ranking either in priority to or pari passu with that charge3.

In the case where a legal charge is to be created, a floating charge over the assets generally should also be created. Certain assets

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