Share Pledge Agreement
Help
Download our Share Pledge Agreement template in Word format. This document is located in the Transfer of Business chapter of Edilex's catalogue of Contract Templates.
Introduction
The movable hypothec with delivery is, as stated in sections 2702 and 2703 CCQ created and published by the surrender of the property to the creditor. Drafting a written agreement is not essential to the creation of said hypothec. Nonetheless, it is better to evidence it in writing, as the writing can be used as proof of the reason for the delivery, thus making the hypothec unequivocal. A written agreement becomes essential if delivery is made to a third party, in order to comply with the requirements of section 2075 CCQ
Description
The Share Pledge Agreement, also known as deposit, is the legal instrument by which a person, called the PLEDGOR, gives the shares he holds in a corporation known as the INTERVENANT, either directly to the CREDITOR or to a third party called the CUSTODIAN, who acts as an intermediary between the pledgor and the creditor.
Use
We recommend the use of this agreement to evidence a relationship in which the pledgor hypothecate its shares to warrant the payment of a sum to the creditor. Unlike the movable hypothec without delivery, the pledge is enforceable against all persons from the moment the shares are held by the creditor. If the shares are held by the custodian, the latter first has to obtain written proof of the hypothec for the pledge to become enforceable against third parties.
