In
English law
English law is the common law legal system of England and Wales, comprising mainly criminal law and civil law, each branch having its own courts and procedures.
Principal elements of English law
Although the common law has, historically, be ...
, a qualifying floating charge is a
floating charge which enables the holder to appoint an
administrator
Administrator or admin may refer to:
Job roles Computing and internet
* Database administrator, a person who is responsible for the environmental aspects of a database
* Forum administrator, one who oversees discussions on an Internet forum
* N ...
or
administrative receiver
In law, receivership is a situation in which an institution or enterprise is held by a receiver—a person "placed in the custodial responsibility for the property of others, including tangible and intangible assets and rights"—especially in ca ...
under the
Insolvency Act 1986 without the need for an order of the court. The change was introduced by the
Enterprise Act 2002, and was designated to streamline the process in relation to the appointment of an administrators (all floating charges historically had the power to appoint an administrative receiver).
A floating charge is a qualifying floating charge if it is expressed to be one, or if the security document purports to give the holder power to appoint an administrator or administrative receiver.
The procedure for appointing an administrator under a qualifying floating charge is as follows:
# the floating charge holder has given at least two business days written notice to any holders of qualifying floating charges with priority over the applicant's (i.e. in that they were created before or take precedence by way of an agreement), and
# the relevant floating charge is
enforceable (i.e. the holder is entitled to call in the
security
Security is protection from, or resilience against, potential harm (or other unwanted coercive change) caused by others, by restraining the freedom of others to act. Beneficiaries (technically referents) of security may be of persons and social ...
), and
# the
company
A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal person, legal or a mixture of both, with a specific objective. Company members share a common p ...
is neither in
liquidation
Liquidation is the process in accounting by which a company is brought to an end in Canada, United Kingdom, United States, Ireland, Australia, New Zealand, Italy, and many other countries. The assets and property of the company are redistrib ...
nor has a
provisional liquidator been appointed, and
# neither an administrator nor an administrative receiver is already in office.
Subsequent to the appointment of an administrator under a qualifying floating charge, the holder of the floating charge must notify the court of the appointment.
References
*
Corporate finance
Property law
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