A fixed charge on any property shall have priority over a floating charge affecting that property, unless the terms on which the floating charge was granted prohibits the company from granting any later charge having priority over the floating charge and the person in whose favour such later charge was granted had notice of that prohibition at the time when the charge was granted to him : Provided that a person is deemed to have notice of such prohibition in a floating charge where a notice indicating the existence of such prohibition is registered with the Commission.
Companies and Allied Matters Act 2020 · Part B · Chapter 9
Section 204Priority of fixed over floating charge
Cite as: Companies and Allied Matters Act 2020, section 204
What this section means
From the guide: Debentures, floating charges and debenture trust deeds under CAMA 2020
- A fixed charge has priority over a floating charge, and the holder of a fixed charge ranks ahead of preferential debts (sections 204 and 207).
- A fixed charge has priority over a floating charge on the same property unless the floating charge prohibited later prior charges and the later chargee had notice, which is deemed if a notice is registered with the Commission (section 204).
Read the whole subject
Source: Companies and Allied Matters Act 2020 (Act No. 3 of 2020), Official Gazette No. 124, Lagos, 10 August 2020. General information, not legal advice.