On Business Pledge

Business pledge is a traditional concept of continental law system, which has been in existence for thousands of years. Nowadays, there are special legislations of business pledge in most countries and regions in the world. Meeting the capital demand by offering small load, covering the shortage of mainstream financial sector, business pledge has so many functions and still plays an important role in modern society.The paper discusses the definition of the concept of business pledge, compares it with the pawning right, common chattel pledge and the system of alienation guarantee, concludes that it is a special real security, and its most remarkable characteristic is the permission of fluidity contract clause. Thus, business pledge is defined as this: business pledgees accept the chattel and possession right of pledgors as pledge guarantee while lending certain amount of money, and they have priority of compensation of pledged assets when pledgors do not pay off the debt within prescribed time limit. In the relationships of business pledge, business pledgee refers to the pawnshop or pawn corporation, which should be the specific enterprise approved in accordance with law. Pawn refers to the pledge guarantee. Business pledge has a function of secure claims. It assures the realization of the rights of the creditor by taking the possession of pawns. It is a special real security by nature. Business pledge started from pawnshops, and lasted for a long time as a way of rising capitals in civil society, thus it has a necessity of existence.Business pledge has had great development in China. However, due to the lack of effective guidance and regulation by law, there still exist many problems. There are no specific regulations in civil law system for business pledge either as a result of the insufficient theoretical research. The limitations of legislations was even more evident since the Ministry of Commerce of the People's Republic of China issued a new Administrative Measures in 2005. These appeared in the conflicts between laws and regulations, rules and practical operation, etc. In order to guide and regulate the development of business pledge in China, it is necessary to study the very theory thoroughly and systematically. As business pledge has a long history in Britain, the United States, Switzerland, Taiwan, and other countries and regions, the relative legislations and rules are well-developed. Based on the investigation of the legislative content and system of above areas, while combining the current legistation of the Administrative Measures of Pawn, the writer analyzes the limitations and shortages of business pledge in our country, then puts forward the idea that we should perfect the legal system, upgrade the legislation level, make particular regulation and form a complete set.This paper is divided into four parts. First, the writer starts with the basic theory of business pledge, definates its concept and analyzes its nature, function as well as legal relationship. And then, through the comparative study, the fundamental characteristics and the relative merits of different countries. review further to explore the basic characteristics and quality. In accordance with actual conditions and base on the analysis of current legal system, the suggestion that we should learn from the experience of other countries fand fully improve the legislation system of business pledge is given.