CHARGE
A charge is
a security. A company creates charge for securing loans or debenture. Charge is
created by way of a mortgage on the assets of the company. Normally, the
debentures and other borrowings of the company are secured by creating charge
on the assets of the company.
Assets may
be both existing and future. Both assets is agreed to be made available as a
security for the repayment of debt. The legal right of the creditor can only be
enforced at some future date if certain conditions governing the loan are not
met. Creditors only get the right to have the security made available/ enforced
by an order of the court.
Kinds of charges:
A charge on the property of the company
as security for debts may be of the following kinds, namely:
1. Fixed charge.
2. Floating charge
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