参考答案：

Companies ordinarily raise the money they need to finance their operations through the issue of share capital, but it is equally common for companies to raise additional capital through borrowing. Such borrowing on the part of the company does not give the lender any interest in the company but represents a claim against the company. There are two types of security for company loans: Fixed charge In this situation a specific asset of the company is made subject to a charge in order to secure a debt. Once the asset is subject to the fixed charge, the company cannot dispose of it without the consent of the debenture holders. The asset most commonly subject to fixed charges is land, although any other long-term capital asset may also be charged, as may such intangible assets as book debts. It would not be appropriate, however, to give a fixed charge against stock-in-trade as the company would be prevented from freely dealing with it without the prior approval of the debenture holders. Such a situation would obviously prevent the company from carrying on its day-to-day business. If the company fails to honour the commitments set out in the document creating the debenture, such as meeting its interest payments, the debenture holders can appoint a receiver who will, if necessary, sell the asset charged to recover the money owed. If the value of the asset which is subject to the charge is greater than the debt against which it is charged, then the excess goes to pay off the rest of the company’s debts. If it less than the value of the debt secured, then the debenture holders will become unsecured creditors for the amount remaining outstanding. Floating charge The floating charge is most commonly made in relation to the ‘undertaking and assets’ of a company and does not attach to any specific property whilst the company meets its requirements as stated in the loan document. The security is provided by all the property owned by the company, some of which may be continuously changing, such as stock-in-trade. Thus, in contrast to the fixed charge, the use of the floating charge permits the company to deal with its property without the need to seek the approval of the debenture holders. However, if the company commits some act of default, such as not meeting its interest payments, or going into liquidation, the floating charge is said to crystallise. This means that the floating charge becomes a fixed equitable charge over the assets detailed, and their value may be realised in order to pay the debt owed to the floating charge holder. All charges, including both fixed and floating, have to be registered with the Companies Registry within BA days of their creation. Failure to register the charge as required has the effect of making the charge void, i.e. ineffective, against any other creditor, or the liquidator of the company. The charge, however, remains valid against the company, which means in effect that the holder of the charge loses their priority as against other company creditors. In relation to properly registered charges of the same type, they take priority according to their date of creation. However, as regards charges of different types, a fixed charge takes priority over a floating charge even though it was created after it. Generally, there is nothing to prevent the creation of a fixed charge after the issuing of a floating charge, and, as a legal charge against specific property, that fixed charge will still take priority over the earlier floating charge. As all the charges in the scenario were properly registered, it follows that the fixed charge takes precedence over the floating charges. Within each category, the charges take priority depending on date of creation, rather than the date of registration. Consequently, the charges assume the following priority: (i) Ko-Bank’s loan, secured by a fixed charge created on E April; (ii) Ina’s loan, secured by a floating charge created on A April; (iii) Jo’s loan, secured by a floating charge created on C April.