Section 203 CAMA 2020

Meaning of floating and fixed charges

(1) A “floating charge” means an equitable charge over the whole or a specified part of the company’s undertakings and assets, including cash and uncalled capital of the company both present and future, but so that the charge shall not preclude the company from dealing with such assets until—

(a) the security becomes enforceable and the holder thereof, pursuant to a power in that behalf in the debenture or the deed securing the same, appoints a receiver or manager or enters into possession of such assets ; or

(b) the Court appoints a receiver or manager of such assets on the application of the holder ; or

(c) the company goes into liquidation.

(2) On the happening of any of the events mentioned in subsection (1), the charge shall be deemed to crystallise and become a fixed equitable charge on such of the company’s assets as are subject to the charge, and if a receiver or manager is withdrawn with the consent of the chargee, or the chargee
withdraws from possession before the charge has been fully discharged, the charge shall thereupon be deemed to cease to be a fixed charge and again to become a floating charge.