Floating Charge Essay

The court verified that a person is a partner and jointly liable with others in the firm “if his agreement with them is that he should be paid by the firm a fixed sum, irrespective of profits, for work done by him”.

Provided Case 09-3, we, Group 7 have dutifully researched the topic, using resources at our disposal to formulate a consistent, clear and legal response. The following submission outlines the case, our conclusions with supporting evidence and the accounting issues present in the subject.

Co= grantor, Lendor= security holder, fixed charge= security int over non-circulating asset s339(4) PPSA, floating charge= circulating security interest in circulating asset, consider if security interest has “attached” and is “perfected”, no diff b/w floating & fixed charge; look at who got

MCI senior officers were concerned with the increasing amount of bad debt due to the number of delinquent Accounts Receivables (AR). A reasonable course of action may have been to improve on the collection of AR. However, the officers were more concerned with their stock portfolios. The officers sought to improve the reputation MCI. The company was attracting a takeover bid that would increase the value of the company’s stock, consequently enriching their own self interests.

Paragraphs 255-10-55-1 through 55-13 of this Section provide guidance on the interpretation of paragraphs 255-10-50-50 through 50-55 for the classification of certain asset and liability items as monetary or nonmonetary. The following table illustrates the application of the definitions to common cases under typical circumstances. In other circumstances the classification should be resolved by reference to the definitions.

1. Current liabilities 2. Usual valuation of long-term liabilities 3. Disclosure notes 4. Long-term liabilities 5. Commercial paper

This essay will critically evaluate on the floating charge being a useful security to banks in the modern day society. There are several controversies surrounding the floating charge which will be examined in this essay. The concept of floating charge over assets as medium of security is relied upon by many companies thereby showing us that it is inevitable for the banks to grant security based on them. The essay commences with an Introduction to concept of loans provided by the banks based on different modes of security followed by the nature and characteristics of the charges. The essay in the second part will discuss about the legal aspects revolving around the charges vis-à-vis registration and the third part will discuss on the advantages of the floating charges as a security. Further down in the fourth part of the essay the researcher attempts to bring out the distinction between the fixed charges and floating charges. The fifth part of the essay analyses the core question of floating charge being an effective security with the help of judicial pronouncements and legislations. Various concept viz, priority, crystallisation, impact of Insolvency Law, Enterprise Act, 2002 are given an insight under this part. The sixth part deals with the scenario in other states to a limited extent. Through the use of legislation, legal precedent and journal articles, a deeper examination will be provided into the application of the law surrounding the above issues and the

This case is related to Carrefour S.A. planning to finance its growth by issuing debt securities and considering borrowing in British sterling in order

This paper describes the impact of the decision made in the case of Tesco Stores Ltd v Brent LBC on the law and its effects on the corporate world, and the comparison between the doctrine of vicarious liability that it outlines and the doctrine of identification that was used earlier to determine the liability of corporations in cooperate crime.

The third ratio mirroring the company’s efficiency is the creditors’ days ratio, which measures, according to Atrill, the number of days in which the business pays its debts to suppliers. Britvic PLC’s financial statements recorded in 2009 a 20 days increase in the above mentioned ratio compared to the 2005-2008 average that had a value of 149 days. Therefore, Britvic PLC paid in 2009 its debts 169 days after the enclosure of the transactions. Taking into consideration the fact that Britvic PLC is operating in the soft drinks industry, which has a medium pace of generating cash, it may be stated that this ratio’s value is high enough to reflect that Britvic PLC is risking the creditors’ goodwill. On the other hand, the company paid its short-term liabilities in approximately four months after receiving the supplies

Samuelson believes that the assets definition should concentrate upon property rights that are concerned with wealth, which provides a true balance sheet orientation, rather than being concerned with revenue generation, Samuelson’s definition may lead to an exit value orientation for assets. One of the key points about the property rights approach lies in exchangeability of the asset. Samuelson’s viewpoint would result in certain deferred charges being expensed immediately even though their incurrence may bring about future economic benefits.

1. Review the decision in the case of Shah v. HSBC (2012) and evaluate the implications of the decision for regulated financial services firms. In particular:

Choosing a Corporation/Company Structure - the business structure of a company/ corporation is highly recommended, it has the flexibility to gain more capital, or credit capability and assets used as security. Based on the Corporation Act 2001 (Cth) AC 22, a corporation is another legal entity with their own legal rights, duties and responsibilities separate to the individual or owner of the company (Harris, Hargovan & Adams, 2013, pp 229). The risk and consequences are one of the principal considerations of choosing a company structure (Harris, Hargovan & Adams, pp 50). Based on the “Corporate Veil” Liability is owned by a separate legal entity and not to the extent of the owner, for instance, the debt of the company is not a personal liability, but the company. This is further explained in the case below.

Whether or not certain assets and liabilities should be placed on a balance sheet is a much talked about subject. The accounting equation, Assets – Liabilities = Ownership Interest, represents the balance sheet; which is produced each year in a Public Limited Company’s financial statement; which can be viewed by the public. I will use this essay to discuss why the asset of a ‘home-grown’ football player, a player who signs as a trainee with a professional club under the age of 16, is not included in the balance sheet of the company.

to the extent that the charge relates to "circulating assets" where the grantor is a company, some unsecured creditors will take priority in respect to the realisation of the proceeds of these assets.