Research On The Pledge Of Accounts Receivable Legal System

In the year of2007, the Property Law stipulated that accounts receivable could be pledged. The Regulation of Registration of Pledge of Accounts Receivable and The Operating Rules of Registration of Pledge of Accounts Receivable were formulated by People’s Bank of China later, clearly defining the concept of accounts receivable and the registration rules. However, problems, such as the concept of accounts receivable, the registration mode, etc, were being controversial since then. Financing by the pledge of accounts receivable is with high risk, because the current legal system can not fully protect the interests of the pledgee. The aim of establishing the pledge of accounts receivable legal system is to take full advantage of accounts receivable, so that the financing problem facing by small and medium enterprises can be solved. Because of the imperfect legal system, the risk of financing by the pledge of accounts receivable is much greater than financing by real estate mortgage. As a result, the business has not developed smoothly in these years, which is far below the initial expectation. Based on the current relevant provisions of China, associated with the practice situation, by analyzing the potential risks and problems of the pledge of accounts receivable legal system, with the aim of realizing the pledge right and promoting the functions of this new security interest, the possible improvement to the current pledge of accounts receivable legal system are proposed.In addition to the preface and conclusion, this article is divided into the following chapters:Chapter one:the status and defects of our current pledge of accounts receivable legal system. Chapter one is to briefly introduce the relevant provisions of China’s pledge of accounts receivable legal system and the registration system, and to closely analyzing the defects to the legal system.Chapter two:the precise scope of accounts receivable. Referring to the scholars’arguments, the practice, and the connotation and denotation of the concept of accounts receivable, conclusion can be made:as one kind of civil rights, the right to charge should be included in the scope of accounts receivable; a fallback provision is necessarily needed in the concept term of accounts receivable, in order to apply to the changing economic setting.Chapter three:perfect the pledge of accounts receivable registration system. After the analysis of the defects of the registration system, this chapter points out the reasons and methods to improve the regulations on registration body, registration content and registration authority. The pledgee should not be the only party that has the right to register a pledge of accounts receivable. Registration contents should be further completed and standardized. The provision on registration deadline should be deleted. Contracts of pledge of accounts receivable are necessarily to be investigated. Check up the relevant laws and regulations, and specify a unique registration authority. In addition to register the pledge information in the registration system, the pledge should be put on record by the relevant authorities for convenient management. The functions of the registration authority are too weak to guarantee the authenticity of the registration contents under the current applied formal investigation system, so a stricter investigation form--inquiring investigation--should be applied.Chapter four:improve the public credibility system of pledge of accounts receivable. To reflect the autonomy of will, the establishment of the pledge should apply the mode of written-contract establishment plus registration antagonism. The publicity should be more specific for the inquirer to assess the risk of the transaction.Chapter five:improve the supporting systems to pledge of accounts receivable, including:simplifying realization methods of pledge and stipulating the pledgee’s right of direct collection; adding the accounts receivable debtors’ notification system and formulating their coordinating payment obligations; supplementing remedies to pledgee’s rights; adding the guiding provisions of rights conflict, and strengthening the provisions to restrain relevant parties conducts. In this chapter, the unique return account principle is proposed to supervise the return of accounts receivable, and the establishment of credit mechanism of the parties is suggested. According to the credit mechanism, the credit of the pledgee and pledgor is rated, and their qualifications to register in the registration system should be examined annually. A blacklist system is introduced. The party with bad faith should be put into the blacklist, whose registering application will be rejected by the registration system automatically. Based on the above credit mechanism, it is suggested that the national enterprises credit system be constructed soon.