Security granted by a company over its movable property : the floating charge and the general notarial bond compared

South African company law was originally based on English companies' legislation and case law. In English law, debentures are closely associated with the floating charge. A floating charge is an equitable charge over some or all of the company's present and future property, which leaves the company free to deal with the property in the ordinary course of business. It developed through case law. The general notarial bond is the closest form of security that South African law has to the floating charge, but it has its origins in the Roman law. The floating charge and the general notarial bond both aim to leave the company to deal with the encumbered assets, whilst giving its taker some form of preference on the company's insolvency. However, the floating charge and the general notarial bond differ in scope and application. This article examines these differences. For instance, it is not possible to create a general notarial bond over a part of the company's assets. It is also not necessarily possible to alienate assets encumbered by a general notarial bond. The article further examines how the floating charge crystallises into a fixed security and how this process differs from perfection of a general notarial bond.