A commercial pledge is a bailment or delivery of personal property to a creditor as security for a debt or for the performance of an act. A pledge right shall be registered with the Pledge Register in accordance with the procedure prescribed by Commercial pledge Law. The collateral may be movable property, also, a claim against other entity, belonging to legal person. The commercial pledge may be separate item of property or it may be complete assets of an enterprise. A collateral shall not be a vessel, publicly traded financial instrument, nor a claim arising from a cheque or a bill of exchange.
A commercial pledge may be used to secure any claim, either existing, or contingent on the basis of an existing liability. It may secure not only the principal claim but also auxiliary claims.
Commercial pledge regulation in Latvia
A commercial pledge is a bailment or delivery of personal property to a creditor as security for a debt or for the performance of an act. A pledge right shall be registered with the Pledge Register in accordance with the procedure prescribed by Commercial pledge Law. The collateral may be movable property, also, a claim against other entity, belonging to legal person. The commercial pledge may be separate item of property or it may be complete assets of an enterprise. A collateral shall not be a vessel, publicly traded financial instrument, nor a claim arising from a cheque or a bill of exchange.
A commercial pledge may be used to secure any claim, either existing, or contingent on the basis of an existing liability. It may secure not only the principal claim but also auxiliary claims.
Registration
of commercial pledge in Latvia
A commercial pledge shall be created on the basis of an agreement or court judgment and registered with the Commercial Pledge Register.
Collateral arrangements shall be valid and binding to third parties in cases when these arrangements are entered and registered in relevant pledge registers. In Latvia are following types of pledge registers which establish a secured claim and are valid in respect with third parties: Real property mortgage register in the Land Register, the Commercial Pledge Register for a pledge of a movable tangible or intangible thing (or an aggregate of things) or the complete assets of an enterprise, the Latvian Ship Register for pledge of vessels, the Financial Collateral Register, The Latvian Central Depository can register liens on listed securities.
The application for registering commercial pledge shall be submitted in Commercial pledge register, the commercial pledge will be registered in the Commercial pledge register within 5 days.