Charges Register

### What must be included in a Charges Register? - [ ] Only the date of charge creation. - [x] Date of charge creation, description of charge, amount secured, and parties involved. - [ ] Only the amount secured by the charge. - [ ] Only the names and addresses of the parties involved. > **Explanation:** A Charges Register must include comprehensive details such as the date of charge creation, description and type of charge, details of the charged property or asset, amount secured by the charge, names and addresses of parties involved, and dates of registration and charge satisfaction. ### What is a charge in the context of a company's assets? - [ ] A type of asset a company owns. - [x] A form of security against a loan. - [ ] A type of dividend payment. - [ ] A company's responsibility for taxes. > **Explanation:** A charge is a form of security that a company provides to a lender to secure a loan, often in the form of some type of collateral like property or machinery. ### Who typically maintains the Charges Register in a company? - [ ] The CEO - [ ] The head of sales - [ ] The IT department - [x] The company's secretary or designated record keeper > **Explanation:** The company's secretary or designated record keeper is responsible for maintaining and updating the Charges Register. ### What is the consequence of not registering a charge within the required period? - [ ] The charge becomes a debt. - [ ] The company must pay a fine immediately. - [x] The charge may be considered void against creditors. - [ ] The company's assets are seized. > **Explanation:** If a charge is not registered within the required period, it may be considered void against creditors and other parties, significantly impacting the lender's ability to recover the loan. ### What is a floating charge? - [ ] A type of mortgage. - [ ] A personal liability. - [ ] A charge over fixed assets. - [x] A charge over a pool of changing assets, such as inventory. > **Explanation:** A floating charge refers to a charge over a collection of assets that can change over time, like a company's inventory or receivables. ### Why is the Charges Register essential for creditors? - [ ] It shows how much profit the company has made. - [x] It provides information about the company's existing liabilities. - [ ] It lists the company’s employees. - [ ] It shows the company’s tax obligations. > **Explanation:** The Charges Register is vital for creditors as it provides detailed information about a company's existing liabilities and encumbrances, helping them assess the company's creditworthiness and risk. ### What is an encumbrance? - [ ] An asset owned by the company. - [ ] A type of corporate tax. - [x] A claim or liability attached to property. - [ ] A form of cash reserve. > **Explanation:** An encumbrance is a claim or liability attached to property, often in the form of a lien or charge. ### What is a lien in corporate finance? - [ ] A type of profit-sharing arrangement. - [ ] A form of corporate credit score. - [x] A right to keep possession of property until a debt is discharged. - [ ] A form of corporate tax obligation. > **Explanation:** A lien is a right to retain possession of property belonging to another person until a debt owed by that person is discharged. ### Which of the following must be updated in the Charges Register? - [ ] New employee hirings - [ ] Annual profit statements - [x] New charges created and charges satisfied - [ ] Company’s marketing strategies > **Explanation:** The Charges Register must be updated whenever a new charge is created or an existing one is satisfied, ensuring that the register reflects the current financial situation accurately. ### What type of asset is typically not included in a floating charge? - [ ] Inventory - [ ] Receivables - [ ] Cash - [x] Land and buildings > **Explanation:** Floating charges usually cover assets that can change or fluctuate, such as inventory and receivables. Fixed assets like land and buildings are typically not included in a floating charge.