What characterizes a floating charge?

A floating charge is a type of security interest that can encompass a variety of assets and is characterized by its provision of flexibility to the borrower. One of its primary features is that it allows the company to continue using its assets in the ordinary course of business. This means that while the charge exists, the company is not restricted from buying, selling, or using the assets as it normally would, which is particularly useful for businesses that rely on inventory or other operational assets.

In contrast, a fixed charge would tie specific assets to the charge, restricting the owner's ability to deal with those assets without the charge holder’s permission. Floating charges typically attach to a pool of assets, such as inventory and receivables, which can change over time. This flexibility distinguishes floating charges from other types of charges, making them appealing in the context of business finance.

The other options do not accurately reflect the nature of floating charges. They suggest limitations or specific conditions that do not align with the fundamental characteristic of floating charges, which is their adaptability and the ongoing usability of the charged assets by the company.