What is Floating charge?

Floating charge: – The floating charge, as a kind of securities, is peculiar to companies as borrowers. An equitable charge which is created on some assets which are constantly changing is called floating charge. For example book debts, charge on stock in trade etc. The company can deal in such assets in its normal course of business unless the charge becomes fixed on the happening of an event. A floating charge is created by the debenture on the assets of the company.