On The Perfection Of Floating Charge System Of Movable Property In China

Floating charge system of movable property originated from "equity" in England.The floating charge system of movable property was first introduced into the property law of China which came into effect on October 1,2007.The civil code which came into effect on January 1,2021 inherited the provisions of the property law on the system.The floating charge system of movable property has the advantages of improving the financing ability of enterprises,reducing the financing cost of enterprises and balancing the interests of mortgagor and mortgagee.There are still legislative and judicial problems in the floating charge system of movable property.From the perspective of legislation,there are mainly the problems of too wide subject scope of movable property floating charge and lack of receiver system.In addition to enterprises,individual businesses and agricultural operators can also be the main body of floating charge system of movable property in China.However,the operation of individual businesses and agricultural operators is unstable and the capital situation is not transparent,which increases the risk coefficient of mortgagee’s mortgage;In addition,there is no receiver system in China’s movable property floating charge system.If the enterprise goes bankrupt or goes into liquidation due to poor management or other reasons,the rights and interests of the mortgagor and the mortgagee can not be effectively protected,which further expands the risk of movable property floating charge to both parties.From the perspective of judicial practice,the first problem is that the identification of "normal business activities" is inconsistent,which inevitably causes damage to the interests of the mortgagee,and does not rule out the mortgagor’s disposal of the mortgaged property in a non-profit situation;The second problem is that the registration rules are not unified,which seriously affects the effect of the mortgagee in the judicial practice;In addition,the crystal system has defects and the compensation order is not clear,which will greatly improve the party’s distrust of the floating charge system of movable property,thus leading to the floating charge system of movable property is difficult to be accepted by creditors,but will increase the difficulty of enterprise financing,thus reducing the efficiency of enterprise financing.In short,the current legal system of floating charge of movable property in China is still not perfect,which leads to the fact that the floating charge system of movable property has not achieved its due social effect in practice.Therefore,only by continuing to improve the floating charge system of movable property in China,can we maximize the efficiency and flexibility of floating charge of movable property,Only in this way can we really solve the problem of financing difficulty and high cost for small and medium-sized enterprises.The perfection of floating charge system of movable property mainly lies in solving the problems of legislation and judicature.Through the overview of floating charge of movable property,this paper provides the theoretical basis for the empirical analysis of floating charge of movable property.At the legislative level,the subject of floating charge is too wide and the receiver system is missing;At the judicial level,there are some problems such as inconsistent identification of "normal business activities",inconsistent registration rules,defects in the crystallization system and unclear compensation;Through the analysis of these problems,it is found that the root cause lies in the imperfection of the relevant provisions of China’s floating charge system of movable property.Finally,it puts forward corresponding suggestions for the improvement of the problems,such as narrowing the scope of the mortgagor,establishing the receiver system,improving the registration system,introducing the automatic crystallization clause and establishing the compensation rules,etc..