Before the 2006 reform, there was no specific provision in France and the creditor could invoke his pledge either by requesting the forced sale of the property or its judicial attribution. Since the reform, there have been concrete solutions. It all depends on the date of the period for which the liability is suspended: the pledge concerns intangible assets and is therefore different from the pledge which concerns movable property. The pledge and pledge may be with or without expropriation. The pledge can be agreed between a creditor and a debtor (contractual privilege), but can also result from a court decision (judicial pledge). The term “pledge” is more commonly used by practitioners to refer to security rights in goodwill. The owner who has given a pledge to his company reserves the right to continue his activity. He is only prevented from selling or transferring it to a company with the consent of the creditor. This form of privilege generally concerns both the physical elements (furniture, technical equipment, fleet of vehicles) and the rights attached to the company (lease law). On goodwill, see the laws of 17 March 1909 and the decree of 28 August 1909 on the sale and pledge of goodwill. The pledging of tools and equipment is provided for by Law No. 51-59 of 18 January 1951 and Decree No.
51-194 of 17 February 1951, and the pledging of professional rights is the subject of Law No. 81-1 of 2 January 1981 and Decree No. 81-862 of 9 September 1981. Any owner who is able to sell can give his land as security, but the pledge does not contain all the elements of the land (rental right, sign ..). The assets pledged as collateral are necessarily intangible movable property, such as a share, a share in civil society, a company or a craft fund. The provisional registration is valid for three years, but can be renewed until the final registration. The final judicial registration is valid for 10 years in the case of the pledging of a company, and without a limited period of validity in the case of company shares. Decree No. 2006-346 of 23 March 2006 reforming securities law, contracts and obligations.
From now on, subtitle II of Title II of Book IV contains a Chapter I entitled “Movable privileges”. The contractual guarantees are set out in articles 2355 et seq. of the Civil Code. New article 2360 provides that if the pledge relates to an account, the pledged claim represents the provisional or final balance at the date of enforcement of the security, subject to the regularization of ongoing transactions in accordance with the procedures provided for in civil enforcement proceedings. Judicial privilege, on the other hand, is governed by the provisions relating to civil enforcement procedures. Under the new article 2355, in the event of default by his debtor, the secured creditor may assign by the court or under the conditions provided for by the agreement the claim as security and the rights relating thereto. The provisional judicial privilege is a preferential right, a legal security that can be created as a precautionary measure, especially for a company. It is enforceable against third parties on the date of completion of the prescribed publication formalities. Provisional publicity must be confirmed by a final notice. The final commitment exists only if the final publication has taken place within the prescribed period. Provisional registration of guarantees is a judicial precaution, not a seizure.
The legal provisions providing for the agreement of the partners in the event of the transfer of pledged shares must not prevent the assumption of this security and Article 39 of Decree No. 92-755 of 31 July 1992 does not apply to shares (2nd Civil Chamber 2 December 2010, Application No. 09-17495, BICC No. 739 of 1 April 2011 and Legifrance). See the note by Mr. Lienhard mentioned in the bibliography below. The security is not possessed, i.e. the debtor retains possession and use of the pledged assets.
A pledge is a guarantee, a security interest in an intangible asset (e.g. shares, goodwill). It is therefore a guarantee for the creditor who acquires a right in an asset from his debtor. The merchant who has pledged his land retains his administration and alienation. He must keep the fund in operation and refrain from any action that could reduce its value. The secured creditor has a preferential right and a resale right. Registration is valid for 10 years. The creditor must renew the registration if the debtor has not repaid it by the end of that period. Registration guarantees 2 years of interest.
It can only be annulled on presentation of a certificate of public approval by the creditor or a court decision. Any interested party may obtain from the register an extract of the particulars or a certificate of non-registration. Security rights relate to industrial property rights only if special entries have been made in the registers of the National Institute of Industrial Property. The deposit does not have to be returned to the owner. Unlike the seller`s privilege, the pledge relates individually to the intangible assets and, if a special mention has been made in the deed, to the equipment. A pledge is an amicable security. The movable pledge is called “pledge”: this is how Article 2072 of the Civil Code is expressed. The pledge is therefore the general term for security rights in movable property Since the order of 23 March 2006, French law defines security as a contract by which a debtor delivers intangible movable property to his creditor in order to secure his debt.
The general securities law is defined in Articles 2355 et seq. of the French Civil Code. In cinema, it is customary to guarantee a loan to a distributor by pledging part or all of the catalogue as collateral. Collateral for this type of asset is listed by the CNC. A lien is a procedure initiated between an entrepreneur and his creditors. This is an approach by companies that want to commit to paying their debts to their creditors and pledging their movable assets. Nantir is a term that expresses the allocation of movable property to secure a debt. The pledge procedure is validated by a contract signed between two parties. It is governed by articles 2355 to 2365 of the Civil Code.
The guarantee is used to secure a debt or finance an asset. If the company is no longer able to pay its debts, the creditor may demand the sale of the assets that have been pledged and are offered at auction.