What are Classification of Charges?

Answer

Fixed Charge

A charge is said to be fixed if it is made specially to cover definite and ascertained assets of permanents nature or assets capable of being ascertained, e.g. Charge on land and building or Heavy Machinery .

Floating Charge:

It is a charge on property which is constantly changing , e.g stock, other assets.

 

The other classification of charge are:

Pari- Passu Charge

Pari-passu charge is created in favor of several creditors , with the condition that they have equal priority.

Second Charge:

A creditor holding a second charge by of mortgage, is entitled to the proceeds after the first charge is met. He must inform the prior mortgage of his charge because the first mortgagee can not part with the proceeds or title of the property if he has notice of the second charge