The System Of Pledge Of Receivables

With the development of market economy, competition between enterprises has become increasingly fierce. To expand sales, enterprises sell goods or services to customers on credit, therefore produced accounts receivable. In 2007, Property Law of People’s Republic of China brought pledge of accounts receivable into the pledge of rights, which to some extent promoted the development of accounts receivable financing and relieved the enterprises’ financing pressure. However, the imperfect law system of the pledge of accounts receivable caused difficulties on determination and operation in judicial practice; conversely, it confined the development of law system which is against the original purposes of legislation. Based on domestic and foreign relevant legislation and theories as well as domestic juridical practice, this paper intends to analysis problems existing in the pledge of accounts receivable system and tries to offer solutions in hope of improving the legal system of pledge of accounts receivable.This paper includes four parts:First part is to introduce the pledge of accounts receivable. Firstly, through describing accounts receivable in different context, the legal concept of accounts receivable and pledge of accounts receivable should be cleared. Secondly, by comparing pledge with assignment and factoring in accounts receivable, this paper analyzes advantages of the pledge of accounts receivable system. It concludes that the pledge of accounts receivable system is irreplaceable, but the imperfection of the law system impeded its development. Therefore it is necessary to enhance its strengths and bypass the disadvantages.Second part is to define the range of object in pledge of accounts receivable. Firstly, this paper describes the essentials of object and current legislative situation, pointing out the problems in the existing regulations. Secondly, the range of object in the pledge of accounts receivable is too narrow for the development of society and economy, therefore a more reasonable and broad range should be required. Moreover, by defining the connotation and extension of future accounts receivable, this paper believes that extremely uncertain pledge of accounts receivable should be limited. Ultimately, this paper analyzes the nature of charging rights and points out that the pledge of charging rights should not be included in the pledge of accounts receivable, therefore it advises to regulate pledge of charging rights separately.Third part is to analyze public announcement in pledge of accounts receivable. Firstly, combing with specific features of the pledge of accounts receivable, this paper analyzes the selection of the way for publicity, which draws a conclusion that registration is the best way. Secondly, it shows the defects of registration publicity system in pledge of accounts receivable in our country. It suggests establishing a debtor system for accounts receivable, clearing the registration authority’s examination responsibility which is more than formal examination but less than substantive examination, improving legal system for accounts receivable’s assignment after pledge, and confirming the invalidation of the pledgor’s assignment after pledge without authorization.Fourth part is to improve the implementation mechanism for pledge of accounts receivable. The implementation mechanism here includes implement method and resolution for the conflicts of rights. Firstly, right of pledgee and right of creditor is distinguished to find proper implement method. Besides ordinary methods, this paper suggests learning from foreign legislation and domestic practices, increasing implement methods such as deposit, direct payment and settlement agreement. Secondly, this paper discusses the right conflicts in the pledge of accounts receivable practices like double pledge, coexisting of pledge and guarantee, coexisting of pledge and right of setoff, and tries to offer solutions.