Can shareholders mortgage shares to borrow money?

Mortgage shares is a flexible financial solution that helps shareholders take advantage of existing assets to quickly mobilize capital. By using shares as collateral, shareholders can access large amounts of capital without having to sell their ownership in the company. This not only helps shareholders maintain their rights, but also creates more investment opportunities in other potential projects, optimizing profits from many investment channels.

Regulations on mortgage of property

Mortgage of property is a form of security arising under the provisions of law. Article 317 of the Civil Code 2015 specifically regulates property mortgage activities. The mortgage of property is carried out based on voluntary principles and compliance with the law.

Accordingly, mortgage of property is when one party uses property owned by him or her to ensure the performance of obligations and does not hand over the property to the other party. Collateral must meet the following conditions:

• Belongs to the legal ownership of the mortgagor
• There is no dispute over ownership
• Transactions are allowed according to the provisions of law
• Has a determinable value at the time of mortgage.

Can shareholders mortgage shares to borrow money?

Pursuant to Article 105 of the Civil Code 2015, shares are determined to be a type of asset. Pledging shares to borrow capital at credit institutions is completely legal. This creates conditions for businesses to mobilize capital.

To mortgage shares, shareholders need to meet the following requirements:

• Legally own the number of shares you want to mortgage
• Shares are not subject to transfer restrictions
• Comply with the provisions of the company charter on mortgage shares
• Follow proper mortgage registration procedures according to regulations.

Rights and obligations of the mortgage shares

Articles 320 and 321 of the Civil Code 2015 provide detailed regulations on the rights and obligations of the mortgagor. The mortgagor is responsible for preserving the property and reporting the condition of the property. At the same time, they have the right to exploit asset value within the limits allowed by law.

The mortgagor’s obligations include:

• Hand over documents related to mortgaged assets in case the parties have agreed, unless otherwise prescribed by law.
• Preserve and preserve mortgaged assets.
• Apply necessary measures to overcome, including stopping the exploitation of the use of the mortgaged property if due to such exploitation the mortgaged property is at risk of losing value or decreasing in value.
• When the mortgaged property is damaged, within a reasonable time the mortgagor must repair it or replace it with another property of equivalent value, unless otherwise agreed.
• Provide information about the current status of the mortgaged property to the mortgagee.
• Deliver the mortgaged property to the mortgagee for disposal when falling into one of the cases of disposal of secured property specified in Article 299 of this Code.
• Notify the mortgagee of the third party’s rights to the mortgaged property, if any; In case of failure to notify, the mortgagee has the right to cancel the mortgage contract and request compensation for damages or maintain the contract and accept the third party’s rights to the mortgaged property.
• Do not sell, replace, exchange or donate mortgaged property, except for the cases specified in Clauses 4 and 5, Article 321 of this Code.

The rights of the mortgagor include:

• Exploit the uses and enjoy the yields and income from the mortgaged assets, except in cases where the yields and profits are also mortgaged assets according to the agreement.
• Invest to increase the value of mortgaged assets.
• Receive back the mortgaged property held by a third person and documents related to the mortgaged property kept by the mortgagee when the obligation secured by the mortgage terminates or is replaced by another security measure.
• To sell, replace, or exchange mortgaged assets, if those assets are goods circulating in the production and business process. In this case, the right to request the buyer to pay money, proceeds, assets formed from proceeds, assets replaced or exchanged become collateral.
• In case the mortgaged property is a warehouse, the mortgagor has the right to replace the goods in the warehouse, but must ensure that the value of the goods in the warehouse is as agreed.
• To sell, exchange, or donate mortgaged assets that are not goods circulated in the production or business process, if agreed by the mortgagee or according to the provisions of law.
• You are allowed to rent or lend mortgaged property but must notify the lessee or borrower that the leased or loaned property is being used as mortgage and must notify the mortgagee.

Rights and obligations of the mortgage shares

According to Articles 322 and 323 of the Civil Code 2015, the mortgagee has the right to inspect and request disposal of the mortgaged property when the agreed conditions arise. They must comply with the asset disposal process according to legal regulations.

Basic rights of the mortgagee:

• Directly review and inspect the mortgaged assets, but must not obstruct or cause difficulties in the formation, use, and exploitation of the mortgaged assets.
• Require the mortgagor to provide information about the actual condition of the mortgaged property.
• Require the mortgagor to apply necessary measures to preserve assets and asset value in case there is a risk of loss of value or decrease in value of assets due to exploitation and use.
• Carry out mortgage registration according to the provisions of law.
• Require the mortgagor or third person holding the mortgaged property to hand over the property to him or her for disposal when the mortgagor fails to perform or improperly performs the obligation.
• Keep documents related to mortgaged assets in case the parties have agreed, unless otherwise prescribed by law.
• Handling mortgaged assets in cases specified in Article 299 of the Civil Code 2015.

Basic obligations of the mortgagee:

• Return documents to the mortgagor after terminating the mortgage in cases where the parties agree that the mortgagee keeps documents related to the mortgaged property.
• Carry out procedures for handling mortgaged assets in accordance with the provisions of law.

Consulting service on mortgage shares to borrow money at Long Phan

Long Phan provides comprehensive consulting services on mortgage shares. Our experienced team will support customers throughout the entire process from appraising the value of shares to completing mortgage documents. Our main services include:

• Consulting on mortgage conditions and procedures;
• Support in negotiating and drafting mortgage contracts;
• Asset appraisal and stock valuation;
• Register for secured transactions according to regulations;
• Advise on the optimal solution when a dispute occurs.

Customers who need detailed advice on mortgage shares for bank loans, please contact Long Phan immediately via hotline 0906735386. Our team will assist you in appraising assets, drafting contracts and completing mortgage shares procedures in accordance with the law, and ensuring your rights.