In English law

English law

English law is the legal system of England and Wales, and is the basis of common law legal systems used in most Commonwealth countries and the United States except Louisiana...

, a qualifying floating charge is a floating charge

Floating charge

A floating charge is a security interest over a fund of changing assets of a company or a limited liability partnership , which 'floats' or 'hovers' until conversion into a fixed charge, at which point the charge attaches to specific assets...

 which enables the holder to appoint an administrator or administrative receiver under the Insolvency Act 1986

Insolvency Act 1986

The Insolvency Act 1986 is an Act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK.-History:...

 without the need for an order of the court. The change was introduced by the Enterprise Act 2002

Enterprise Act 2002

The Enterprise Act 2002 is an Act of the Parliament of the United Kingdom which made major changes to UK competition law with respect to mergers and also changed the law governing insolvency bankruptcy.-Structure:*Part 1 The Office of Fair Trading...

, and was designated to streamline the process in relation to the appointment of an administrators (all floating charges historically had the power to appoint an administrative receiver).

A floating charge is a qualifying floating charge if it is expressed to be one, or if the security document purports to give the holder power to appoint an administrator or administrative receiver.

The procedure for appointing an administrator under a qualifying floating charge is as follows:

1. the floating charge holder has given at least two business days written notice to any holders of qualifying floating charges with priority over the applicant's (i.e. in that they were created before or take precedence by way of an agreement), and
2. the relevant floating charge is enforceable (i.e. the holder is entitled to call in the security
   Security interest
   A security interest is a property interest created by agreement or by operation of law over assets to secure the performance of an obligation, usually the payment of a debt. It gives the beneficiary of the security interest certain preferential rights in the disposition of secured assets...
   
   ), and
3. the company is neither in liquidation
   Liquidation
   In law, liquidation is the process by which a company is brought to an end, and the assets and property of the company redistributed. Liquidation is also sometimes referred to as winding-up or dissolution, although dissolution technically refers to the last stage of liquidation...
   
    nor has a provisional liquidator
   Liquidator (law)
   In law, a liquidator is the officer appointed when a company goes into winding-up or liquidation who has responsibility for collecting in all of the assets of the company and settling all claims against the company before putting the company into dissolution....
   
   been appointed, and
4. neither an administrator nor an administrative receiver is already in office.

Subsequent to the appointment of an administrator under a qualifying floating charge, the holder of the floating charge must notify the court of the appointment.