Section 332 Effect of floating charge – Companies Act 2013

Amended and updated notes on section 332 of Companies Act 2013. Detail discussion on provisions and rules related to effect of floating charge.

Amended and updated notes on section 332 of Companies Act 2013. Detail discussion on provisions and rules related to effect of floating charge.

Chapter XX (Section 270365) of the Companies Act, 2013 (CA 2013) deals with the provisions related to winding up. Section 332 of CA 2013 provides for effect of floating charge.

Recently, we have discussed in detail section 331 (Liabilities and rights of certain persons fraudulently preferred) of CA 2013. Today, we learn the provisions of section 332 of the Companies Act 2013.

The provisions of section 332 are effective from 15th December, 2016. You may refer Notification No. S.O. 3677(E) issued dated 7-12-2016. In this article, you will learn detail of the provisions of section 332 the Companies Act 2013.

Name of ActThe Companies Act 2013
Enacted byParliament of India
Administered byMinistry of Corporate Affairs (MCA)
Number of Chapters29
Number of Sections484 (470-43+57)
Number of Schedules7
You are reading:
Chapter No.XX
Chapter NameWinding Up
Section No.332
Section NameEffect of floating charge
Monthly Updated EditionCompany Law PDF

Section 332 of Companies Act 2013: Effect of floating charge

Section 332 shall come into force on 15th December, 2016 vide Notification No. S.O. 3677(E) dated 07.12.2016.

Where a company is being wound up, a floating charge on the undertaking or property of the company created within the twelve months immediately preceding the commencement of the winding up, shall, unless it is proved that the company immediately after the creation of the charge was solvent, be invalid, except for the amount of any cash paid to the company at the time of, or subsequent to the creation of, and in consideration for, the charge, together with interest on that amount at the rate of five per cent per annum or such other rate as may be notified by the Central Government in this behalf.


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