Companies Act 2014 section 598

Other circumstances in which floating charge is invalid

Section 598 sets out the circumstances in which a floating charge created in favour of a company officer or connected person can be declared invalid when the company goes into liquidation.

• A floating charge created within 12 months before liquidation in favour of a company officer or connected person may be declared invalid
• The charge is invalid to the extent of any debt owed to that officer or connected person that was repaid (wholly or partly) during the same 12-month period
• The charge can be saved from invalidity if it is proved that the company was solvent immediately after creating the charge
• The definition of "officer" is broad, extending to spouses, civil partners, children (including a civil partner's children ordinarily resident with the officer), and nominees of the officer