The difference between a floating charge and a general mortgage.

1. Differences between applicable subjects and scopes.

The Property Law stipulates that floating charges can only be applied to enterprises, individual industrial and commercial households, and agricultural producers and operators, and the scope is narrow. Fixed mortgages are applicable to any creditor, debtor and third party in economic activity and are broadly applicable.

2. The main differences between the subject matter of the mortgage.

The property that can be subject to floating charge is limited to production equipment, raw materials, semi-finished products, and movable property, while immovable property, intellectual property rights, bonds, etc. are excluded from the scope of the subject matter of floating charge, and the scope of things allowed for floating charge is narrower.

With regard to the property used for fixed mortgage, all movable and immovable property that is not prohibited by laws and administrative regulations from being mortgaged can be mortgaged, and the scope of things that are allowed to be fixed mortgage is relatively wide.

3. The mortgagor has different powers to dispose of the mortgaged property during the mortgage period.

The mortgagee shall not oppose a buyer who has paid a reasonable price and acquired the mortgaged property in the ordinary course of business.

During the fixed mortgage period, the mortgagor must obtain the consent of the mortgagee if the mortgagor transfers the collateral; The mortgagor shall not transfer the mortgaged property without the consent of the mortgagee.

Fourth, the certainty of the collateral is different.

When creating a mortgage, the collateral of a floating charge is uncertain, and the mortgaged property can only be determined when the agreed or statutory conditions for the realization of the mortgage are fulfilled, that is, the amount of mortgaged property can only be determined at this time. In the case of a fixed mortgage, when the mortgage contract is concluded at the beginning, the collateral is determined, and the quantity and value of the collateral itself are relatively determined.

What does a floating charge mean.

1) The meaning of the two is different:

1. Meaning of floating charge: Floating charge is a special mortgage, which refers to the security created by the mortgagor on all or part of the property owned by the mortgagor now and in the future, and the mortgagor retains the right to dispose of the mortgaged property in the normal course of business before exercising the mortgage right. The concept of floating charge** is a special mortgage system developed in the judicial practice of the English Court of Chancery.

2. The meaning of general mortgage: It means that the mortgagor and the creditor enter into an agreement in writing not to transfer the possession of the mortgaged property and to use the property as security for the creditor's rights. When the debtor fails to perform its debts, the creditor has the right to be repaid in priority at the price of the property or the price of the auction or sale of the property in accordance with the law.

2) The characteristics of the two are different:

1. Characteristics of floating charge:

1) The subject matter belongs to all the existing or future property of the mortgagor.

2) These properties are in a state of constant change in the mortgagor's daily production and operation.

3) The mortgagor may continue to operate in the usual way until the mortgagor or its ** person will take certain actions in the future.

2. Characteristics of general mortgages:

1) The mortgagor and the mortgagee shall enter into a mortgage contract in writing.

2) Mortgage does not transfer possession of the mortgaged property.

3) When the debtor fails to perform its debts, the creditor has the right to be repaid in priority at the price of the property at the price of the property or the price of the auction or sale of the property in accordance with the law.

3) The roles of the two are different:

1. The role of floating charge: As a security interest system with existing and existing property as the subject matter, floating charge undoubtedly expands the scope of property that can be used as security. Before the mortgagee exercises the mortgage right, the floating mortgagee has the right to dispose of the mortgaged property freely, so it takes into account the needs of normal operation and financing.

In addition, the existence of the receiver system can also maintain the existence of the enterprise as a whole when the mortgage is realized, so that the enterprise will not be forced to sell and auction, and the value of the enterprise can be fully utilized.

2. The role of general mortgage: mortgage is an important feature of the loan contract, which is that when there is collateral, the security of the bank's loan will be improved, but at the same time, the cost of the borrower will also increase, because of this, the interest that the borrower is willing to pay to the bank will be lower, and the bank's income may not increase.

To sum up the above, floating charge is also a mortgage method, but there is no specificity in this way, the collateral is to guarantee the existing and future products, therefore, the two parties must negotiate when dealing with it, only in this way can their respective rights and interests be protected, and the debtor must also fulfill its obligations.

Movable property floating charge Precautions are as follows:

1. The creation of a floating mortgage on movable property shall be registered. Clause.

2. The effect of the registration of a floating charge is that it is not registered against a bona fide third party; Clause.

3. There are exceptions to the adversarial power of floating charge registration. Enterprises, individual industrial and commercial households, and agricultural producers and operators may pledge existing and future production equipment, raw materials, semi-finished products, and products, and if the debtor fails to perform the debts due, the creditor shall have the right to be repaid in priority for the movable property at the time of the determination of the mortgaged property.

Article 411 of the Civil Code of the People's Republic of China: Where a mortgage is created in accordance with the provisions of Article 396 of this Law, the mortgage shall be determined when one of the following circumstances occurs: (1) The period for performance of the debt has expired and the creditor's rights have not been realized; (2) The mortgagor is declared bankrupt or dissolved; (3) the circumstances of realizing the mortgage as agreed by the parties; (4) Other circumstances that seriously affect the realization of creditor's rights.