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    PracticeACCAACCA LW — Corporate and Business Law Practice Exam 2Question 43
    Easy1 markMultiple Choice
    Insolvency lawSection ASyllabus GCorporate and Business Law

    ACCA · Question 43 · Insolvency law

    What is the legal term for the event where a floating charge converts into a fixed charge, attaching to the specific assets held by the company at that moment?

    Answer options:

    A.

    Liquidation.

    B.

    Crystallisation.

    C.

    Subrogation.

    D.

    Novation.

    How to approach this question

    Identify the term used when something fluid (floating) becomes solid (fixed).

    Full Answer

    B.Crystallisation.✓ Correct
    Crystallisation is the process by which a floating charge ceases to 'float' over a changing pool of assets and becomes a fixed charge on the specific assets owned by the company at that exact time. This usually happens upon default, receivership, or liquidation.

    Common mistakes

    Confusing the trigger event (like liquidation) with the actual legal mechanism (crystallisation).
    Question 42All questionsQuestion 44

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