Company equity pledge refers to a financing method in which shareholders obtain loan funds from banks and other financial institutions with their company shares as collateral. In China, the legal provisions of equity pledge mainly include the Company Law, the Guarantee Law and other relevant laws and regulations, which are supervised by the CSRC. According to Article 49 of the Company Law, shareholders of a company may transfer their shares or use their shares as collateral, but they must abide by laws, administrative regulations and the articles of association and report to the board of directors of the company. In addition, equity pledge also needs to pay attention to the relevant provisions of the Guarantee Law, the Measures for the Administration of Corporate Bonds and the Measures for the Administration of Shareholder and Director Reduction of Listed Companies. In addition, the equity pledge of listed companies on the stock exchange needs to meet the relevant requirements and approval procedures of the CSRC. For example, according to the Measures for the Administration of Shareholder and Director's Reduction of Listed Companies, shareholders are required to submit the relevant information of the equity pledge to the CSRC after the equity pledge reaches a certain proportion, and fulfill the obligation of information disclosure as required.
What are the risks of company equity pledge? How to avoid these risks? The company's equity pledge faces many risks such as the borrower's inability to repay the loan and the decline in the value of the collateral. In order to avoid these risks, it is suggested that shareholders should make full asset evaluation and risk evaluation before making equity pledge, and take effective risk control measures, such as diversifying investment risks and choosing reliable financial institutions.
Corporate equity pledge is a common means of financing, but it also has certain risks. When making equity pledge, shareholders need to abide by relevant laws, regulations and regulatory requirements, and conduct adequate risk assessment and risk control measures.
Legal basis:
Article 32 of the Guarantee Law of People's Republic of China (PRC) * * * The guarantor shall provide guarantee for the guaranteed creditor's rights as agreed, and bear the guarantee liability as agreed, except as otherwise provided by law or agreed by the parties. If the guarantor fails to perform the guarantee responsibility, the creditor may give priority to the guaranteed property.