1. What impact will the company’s listing process have after equity pledge?

Yashan Lawyer, Turpan Lawyer, Huainan Lawyer, Guangyuan Lawyer, Zhangye Lawyer, Ulanqab

Equity pledge is a normal financing method for enterprises. Many companies planning to be listed will pledge their equity before going public. This can increase the company's cash flow and at the same time, the equity will change. So what will be the impact on companies going public after equity pledge? Below we have compiled some content based on relevant materials, and look at the analysis below.

1. The impact of equity pledge on corporate listings

The equity of the initial issuer is clear, and there are no significant ownership rights between the controlling shareholder and the shares controlled by the controlling shareholder and actual controller. Therefore, clear equity is a necessary condition for the initial listing of domestic companies.

In fact, equity pledge is a normal financing behavior of shareholders. However, equity pledge may involve judicial litigation or freezing of equity, and the stability of the equity structure of other third-party companies or actual issues will also concern the equity pledge issue. Whether the equity will result in major unfulfilled debts due due to equity pledge, whether there will be incentives to misappropriate assets of the company to be listed, etc. If there is such a risk, it must be handled with caution. If not, the company only needs to disclose the release of the equity pledge normally. If it must be paid off before listing, it needs to be proven that the debt can be paid off on time.

Equity pledge generally means that the controlling shareholder uses its own equity to guarantee corporate financing. There is generally no problem in this situation, because the reasons for the equity pledge are reasonable and without malicious intent, and the debtor has a certain ability to repay. If a shareholder pledges his or her equity for debt, there should generally be no problem if a shareholder holding less than 5% of the shares pledges his or her equity for debt.

2. Practical issues that may be encountered in the process of equity pledge

Then, the debtor or a third party holds a limited liability company or an unlisted joint-stock company (with equity) (pledging a loan relationship to an investor), what aspects does the investor need to consider? What practical issues may be encountered? During the equity pledge process of investment projects, the author believes that there are the following issues that need to be paid attention to or solved. Among them, the first and second points below focus on reminding the pledgee to pay attention. The third and fourth points also put forward the author’s views, and The third and fourth points are also the main thrust of this article.

1. Before equity pledge, are there any restrictions on equity pledge in laws, regulations and administrative regulations? If so, in addition to separate regulatory provisions, are there any restrictions on equity pledges in the articles of association of the target company or the pledger company?

2. When establishing an equity pledge, what terms should the pledgee be specifically reminded to agree on in the equity pledge agreement? When registering the establishment of an equity pledge, what materials should be submitted are inconsistent and how to determine them? If the industrial and commercial registration agency requires a pledge contract based on a format template, the pledgee should not only register the establishment, but also encounter issues regarding the determination of the pledging shareholder. For example, should the equity pledge be approved by the spouse of the pledging shareholder? If there is an actual investor, does it?

3. After the equity pledge is established, will the value of the equity decrease? If the value is significantly reduced, will there be any adverse impact on the pledgee? What are the behaviors or matters that damage the rights and interests of the pledgee? What are the factors that influence equity value? How should equity value be judged? In addition, can the pledgee exercise the interest rights of the pledged shareholder? Can the pledgee? What if the pledged shareholder disposes of the pledge without authorization?

4. When the equity pledge is judicially realized, what procedures should be paid attention to when realizing the pledge? If the pledged equity is frozen first by others, will the realization of the pledge protect the rights and interests of the equity pledgee? How to coordinate the prior freezing and priority claims? When the equity pledge is realized, if there are other priorities on the equity, how to balance and coordinate the priority right to repayment of the equity pledge and other priorities?

Although equity pledge is a good financing method for enterprises, for enterprises planning to be listed, it should be operated with caution. Because it involves equity changes, etc., the equity pledge operation must be clear, so as not to affect the listing, speed up the listing process of the company after the equity pledge, and complete the final listing. For more relevant knowledge, you can consult Shangluo lawyers.

Extended reading:

When does the patent pledge contract take effect?

What is the validity of an unclear pledge contract?

When is the equity period? What is the process?

2. What factors affect equity pledge?

1. Constraints on the comprehensive development of intellectual property rights and equity.

1. The value evaluation system for intellectual property rights such as trademark rights and patent rights is not yet perfect, and independent evaluation criteria have not yet been formulated, so there are valuation risks. Although our country currently has developed intangible asset valuation guidelines, there are no separate guidelines for various types of intellectual property rights such as trademarks and patented technologies. Since the characteristics of various types of intellectual property rights are significantly different, there are no independent and systematic evaluation standards, and the evaluation level is difficult to measure, resulting in a lack of authoritativeness in the evaluation value. Financial institutions use this as a basis to determine the loan amount, and there are certain risks.

2. The equity prices of listed companies are highly sensitive to the market, stock prices fluctuate frequently, and risks are difficult to control; while the equity value of unlisted companies is difficult to calculate and liquidity is poor. Once a non-performing loan is formed, the pledged equity will be More difficult to cash out.

3. The cost of handling the pledge registration procedure in another place is high, which increases the burden on the enterprise. In addition to the normal loan fees for the exclusive right to use a trademark, the pledge registration procedures require both parties to the loan and the loan or the authorized person to go directly to the State Trademark Administration in Beijing. The travel costs are too high, resulting in an increase in loan costs, especially for some companies with small capital needs. In fact, it adds to the burden.

4. The domestic intellectual property transfer market is not yet perfect, and it is difficult to realize trademark rights. In our country, a trademark is regarded as a sign of a specific product or service. If it is separated from the goods or services it is associated with in the public eye, it may lose value or cease to exist. In addition, my country has not yet established a unified intellectual property transfer market, and the transfer of trademark rights is difficult. If a loan defaults, it is generally difficult for financial institutions to liquidate the trademark rights in a short period of time, thus affecting the enthusiasm of some financial institutions to participate.

3. What are the constraints on rural equity?

The main constraints on rural equity pledge loans are: 1. The lack of third-party institutions for equity assessment, and the fairness of its assessment is difficult to achieve with commercial banks. Agree. 2. Due to legal constraints, the transfer of mortgaged rural homesteads, farm buildings and collective equity is restricted, making it difficult to realize and dispose of risks once risks arise. 3. The natural weakness of agriculture leads to high risks in rural equity mortgage loans. Article 63 of the "Land Management Law" stipulates that the use rights of land collectively owned by farmers shall not be transferred, transferred or leased for non-agricultural construction; however, enterprises that comply with the overall land use plan and obtain construction land in accordance with the law, due to bankruptcy or merger Exceptions are made where land use rights are transferred in accordance with the law due to other circumstances.

IV. Under what circumstances will equity pledge occur

If a company or individual wants to borrow money, it must mortgage real estate or stocks or other securities. The use of stocks as collateral is equity pledge