Who can be pledged?

The pledge of goodwill is a guarantee which can be used by a business or head of company to guarantee a occupational debt. In general, the creditor go ask the debtor to provide a guarantee for to ensure payment of the debt.

The individual entrepreneur (IS) or the business who pledges his business is called the constituent.

What kind of debt can be secured by collateral?

The pledge may relate to any type of debt, including a future debt. For example, a bank may ask a business to provide a guarantee to ensure that its bank account remains positive. As soon as the balance turns negative, the debt grows. On the other hand, the convention must specify the information which will enable clearly identify the debt.

Can a goodwill be pledged multiple times?

A goodwill can be pledged multiple times to different creditors.

In this case, it is the order in which the pledges are recorded that will determine the order in which the claims are paid (from the oldest to the most recent).

Where a goodwill is pledged, the pledge may include on the next items :

• Sign and trade name
• Right to lease
• Customers and traffic
• Commercial furniture
• Equipment or tools used for the exploitation of the land
• Patents of invention
• Licenses
• Brands
• Industrial designs and related intellectual property rights

If nothing is specified in the pledge, it contains only the brand and trade name, the right to lease, the customer base and the traffic.

Where the branches are included in the collateral, each branch must be clearly identified as having its registered office.

To be valid, the collateral must be established by a authentic instrument or private.

It shall contain the following elements:

• Designation of secured debt
• Designation of the goodwill and its component parts
• Value of goodwill
• Price of each goodwill item

So that the pledge can be enforceable, it is necessary to enter the pledge in the register of security rights and other related transactions. This listing makes the pledge public.

If the pledge agreement was drafted by a notary, it is up to him to take the steps to publish the pledge. The grantor and the creditor may decide otherwise.

The creditor or notary must send the original or a copy of the pledge at one of the registries following:

• Registry of the Commercial Court in which the grantor is principally registered in SCR: titleContent
• For Alsace-Moselle: Registry of the judicial tribunal ruling judicially competent according to the place in which the grantor is principally registered with the RCS

If the act in question is a authentic instrument, he will have to send a shipment of the deed. He must also attach to these documents the registration form of the pledge (in 2 copies if the request is made by mail):

Trade fund pledge privilege registration slip

The entry in the register shall be valid for a 10-year term. Before the end of this period, the creditor must submit an application for renewal, otherwise the collateral will be written off. The request for renewal must be made at registry which entered the pledge using the following form:

Trade Fund Pledge Renewal Form

In case of modification of collateral, the creditor must apply to the registry which entered the pledge for registration of an amendment to the pledge. He must send the relevant note and indicate information to which the application for amending registration relates, the date of initial registration and sound serial number :

Change of Warranty Request Form for goodwill

It is possible that the hedged goodwill contains industrial property rights. These include, for example, a trademark, patents and designs attached to the goodwill. In this case, additional formalities must be carried out.

It is necessary to make a declaration to the National Institute of Industrial Property (Inpi). A copy of the pledge agreement between the owner of the goodwill (and the trademark) and the creditor must be mailed. You must also attach the certificate intended for Inpi given by the registry of the Commercial Court or the Judicial Court (Alsace-Moselle).

When the debtor does not pay the debt secured by the pledge, the creditor may apply to the court for forced sale of the goodwill. The latter must apply to the commercial court of the place of exploitation of the goodwill. It must inform the debtor and the third party settlor who pledged its goodwill (if any) and wait 8 days before it can proceed to a public auction. The latter must be carried out by a Commissioner of Justice or a sworn goods broker.

Once the pledged debt has been fully paid by the debtor (principal debt, interest, etc.), the collateral must be written off the personal security registry and other related transactions.

The creditor must send the debit slip to the Registry of the Commercial Court or the Judicial Court (Alsace-Moselle)who posted the pledge. It must also indicate the date of entry of the pledge and its serial number:

Write-off slip pledge goodwill

Any other person may also request the cancelation of the pledge. The person must attach to the cancelation slip one of the following supporting documents:

• Proof that the parties agree that the pledge should be written off
• Court decision requesting the cancelation of the pledge
• Document recording the sale of the shares pledged with the receipt recording payment of the price and a copy of the extract from the entries in the specific register

The cost of the radiation varies depending on the type of radiation made. It can be total or partial.