What is the basic premise of the measures?
The Measures establish a set of practical rules governing the registration procedures for the pledging of shares in limited liability companies registered in Shanghai.
When did the measures come into effect?
The measures came into effect on January 1st
Which legislation do the measures relate to?
The measures relate to Article 226 of the Property Law
Why are the measures necessary?
The measures clarify the procedures necessary to properly register share pledges and in doing so reduce any ambiguities present in this regard in Article 226. The measures also seek to improve public recognition of share pledges through more effective public announcements.
Are the measures applicable to foreign investment enterprises?
The measures are not applicable to foreign investment enterprises. The Measures are only applicable to the pledge registration of shares of domestic limited liability companies registered in Shanghai.
Under the measures is the Shanghai Municipal Administration of Industry and Commerce responsible for verifying the legality of submitted documents?
Under the measures it is the responsibility of the parties to the share pledge to verify the legality of documents and not the Shanghai Municipal Administration of Industry and Commerce.
Under the measures what is information is needed to register a share pledge?
Under the measures the names of both parties to the pledge, the value of the share pledge and the term of the pledge are necessary in order to successfully register the share pledge.
Is it possible to have an indefinite pledge term?
Yes. If the parties wish the pledge to last indefinitely they may state the term as “indefinite”.
What documents are necessary in order to register a share pledge?
· An application form for the registration of share pledge
· Documents evidencing the joint appointment of a representative or agent;
· Contract for the share pledge;
· Identification documents of the pledgor and pledgee regarding their capacity as entities or natural persons;
· Documents indicating the pledge in question and shareholdings of the pledgor as recorded in the register of members of the limited liability company; and
· Evidential documents indicating that the articles of association of the limited liability company do not contain any clauses prohibiting transfer of shares.
Are the same documents necessary for canceling and altering share pledges?
All of the documents listed for registering a share pledge are necessary for altering or canceling a pledge.
Are the procedures the same in all Shanghai municipality branch offices?
The procedures vary from office to office. For example, in the PuDong office explanatory notes on the pledge are needed for registration. The relevant office should be contacted for information relating to the exact procedures of each office.
