What Is a Shared-Equity Mortgage?

Equity pledge (Pledge of Stock Rights), also known as equity pledge, is a pledge established by a pledger to use its equity as the subject of a pledge.

Equity pledge

Equity pledge (Pledge of Stock Rights)

The general view is that

I. Equity pledge process

1. Types of companies that can apply for equity pledge (limited liability companies and unlisted joint stock companies)

2. Fill in forms and other materials (fill out the "Application Form for Equity Pledge Establishment" and other forms: Submit

China's "Company Law" lacks provisions on equity pledges. What really established China's pledge guarantee system was the "Guarantee" which was implemented on October 1, 1995.

share

China's Company Law and related regulations have not directly negated or affirmed the issue of the secondary pledge of equity in domestic companies, but this is not the case with regard to the issue of secondary pledge of equity in foreign-invested enterprises.

Equity rights as a security right are

The effectiveness of equity pledge is the core content of the equity pledge system. The effect of equity pledge right refers to the effect of the pledgee's priority to be paid within the scope of the secured debt on the pledged equity and the restriction and influence of the pledge right on other rights existing on the pledged equity.

I. Effect on the scope of secured claims

Due to the pledge of rights, if the law does not make special provisions, the relevant provisions of the pledge of movable property are permitted. Therefore, the scope of the creditor's rights secured by the equity pledge is the same as that of the movable property pledge. However, most countries' legislation has provisions on the scope of pledge guarantees. It mainly includes: main claims, interest, delayed interest, pledged costs and liquidated damages. As for liquidated damages, Article 1210 of the German Civil Code and Article 346 of the Japanese Civil Code provide for the scope of pledge security.

Taiwan, China

Equity pledge mainly refers to the pledge that the pledgee takes the equity of a company limited by shares (listed or unlisted company) or equity of a limited liability company as a pledge to guarantee an economic behavior. Legal procedures for equity pledge:

preliminary work

1. Understand the relevant situation of the pledger and the equity to be pledged.

Stingy

Hidden risks of equity plunge in stock market

Well-known economist Song Qinghui told reporters that equity pledge is one of the important financing tools of major shareholders of listed companies, and the scale of financing is generally not too small. When the stock prices of listed companies are frequently cut, major shareholders will also face problems Investors need to pay close attention to the same risks as leverage. ^[3]