This is a self-test question on floating and fixed charges, in Dignam and Lowry "Company Law".

Question 3.

On 1 March A Ltd created a floating charge over its assets in favour of Lendit Bank as a security for a loan of 70,000. The charge was not registered.

On 1 April A Ltd created a second floating charge in favour of Credit Bank as a security for an existing overdraft facility of 15,000. The charge contained a term prohibiting A Ltd from creating subsequent charges which would rank in priority to Credit Bank's. Credit Bank's charge is duly registered.

On 1 May A Ltd purchased computer equipment from Hightech Ltd at a price of 75,000. A paid 10,000 in cash and created a fixed charge over its book of debts in favour of Hightech Ltd to secure the balance of the purchase price, This charge was duly registered.

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