This checklist sets out the factors to consider when a company is proposing to grant a floating charge. It assumes that an English or Welsh company will be granting a floating charge to a lender situated in England or Wales.

In this checklist:

1. •

   the company granting the floating charge is called the 'chargor'

2. •

   the entity to which the floating charge is granted is called the 'chargee', and

3. •

   the document containing the floating charge is called the 'security document'

For detailed information on the nature of floating charges and the differences between fixed and floating charges, see Practice NoteFixed and floating charges. For information on the advantages and disadvantages of taking a floating charge, see Practice Note: Floating charges—advantages and disadvantages.

For detailed information on considerations when taking a floating charge, see Practice Note: Floating charges.

A floating charge can form part of the security created by a debenture—see Practice Note: Key features of debentures. Debentures also typically contain other types of security interest such as mortgages, assignments and fixed charges.

A floating charge