Equity Pledged A Number Of Legal Issues

Share right pledge is that the pledger creates the pledge with his (or her) share right as the subject matter in order to guarantee his (or her) debts. As a kind of security, the pledge of share right is different from that of movables and has its own legal characteristics. Because of the functions and the value, the share right pledge becomes more and more necessary and feasible in the flourishing market trade. Especially, it is of much importance to accelerate the circulation of the funds and flourish the market that the shareholders get loans by.creating share right pledge. However, our current system of share right pledge has some defects so that commercial banks face many risks in providing share right collateral loans. Therefore, this dissertation, about 30000 words, consisting of nine parts, makes some research about share right pledge.Part One is about the legal characteristics and the economic functions of share right pledge. Besides the general characteristics of right pledge, share right pledge has other legal characteristics that it is risky, beneficial, convenient and nationally interfered. Share right pledge emerges and develops, because in the market economy it has the functions of promoting the circulation of the funds, expanding the credit, stabilizing the stock market and guiding the market.Part Two points out that the parties in share right pledge generally include the pledgor, the pawnee and the third party. The pledger may be the debtor himself (herself) or the other third party.Part Three gives a clear definition for the meaning of these concepts such as share right, share certificates, provided capital and the certificates of provided capital, pointing out the subject matter of the pledge is the share right, which the shareholder has to the company on the basis of the provided funds.Part Four respectively inspects the creation of the share right pledge of the s tock 1 imi ted company and the 1 imi ted-1 iabi 1 i ty company. If creating the share right pledge of the stock limited company, the parties must take care of the following: the collateral stocks must be negotiable, and the parties must make a written pledge contract and register with the stock registration organ. If creating the share right pledge between the shareholders of the limited-liability company, the parties must make a written pledge contract and register in the shareholders' roll. If creating the share right pledge to the other people except the shareholders, as anadditional condition, the parties must obtain the consent of more than half of the shareholders. Moreover, our laws provide more, strict pledge requirements on foreign investment enterprises.Part Five states the rights and the obligations of the pledger and the pawnee in share right pledge.Part Six clarifies the validity scope of the share right pledge, focusing on the validity to the secured creditors' right and the subject matter.Part Seven expounds the achievement of the share right pledge, including the general provisions on the implication, conditions and ways of the share right pledge achievement, and the special requirements on the share right pledge achievement of the stock limited company and the limited-liability company.Part Eight brings to light the chief risks which the commercial banks face in providing stock collateral loans, then gives some precautions against the risks.Part Nine puts forward some suggestions on how to improve the system of the share right pledge, for example, permitting natural people and common enterprises get stock collateral loans, expanding the scope of the pledge stocks, and so on.