When a floating charge becomes a fixed charge ?

A floating charge would be useless if the lender could not convert it into a fixed charge. In certain circumstances the lender can do this and this process is called ‘crystallization’. A floating charge may crystallize or become fixed in any of the following ways:

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1. When the company eases to carry on business; or

2. When the company goes into liquidation; or


3. When default is made in the payment of any principal money or interest and the debenture-holder bring an action to enforce his security; or

4. When a receiver is appointed.

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