Pledges of business assets: Definition and formalities
Posted: Tue Feb 11, 2025 8:00 am
The pledge of goodwill is a real guarantee that offers business leaders and companies the possibility of pledging their goodwill to secure a debt, often linked to a professional loan. This mechanism, regulated by the Commercial Code, allows the creditor to obtain priority to recover his debt, in particular by selling the goodwill in the event of default. Are you wondering how it works? What are the different types? And above all, what steps should you take to pledge a goodwill? We explain everything to you, step by step.
Pledges of business assets: Definition and formalities
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In summary:
The pledge of goodwill is a real guarantee which makes it possible to secure a debt by pledging the goodwill for the benefit of a creditor;
In the event of default of payment, the creditor may request the forced sale of the assets to recover his debt, with a right of priority;
The pledge may be conventional (agreement between the parties) or judicial (imposed by a judge);
The elements of the business that can be pledged include in particular the trade name, the right to the lease, the clientele, and the equipment, but not the stocks or the debts.
Pledge of business assets: What is it? Definition
The pledge of goodwill is a real guarantee allowing a debtor (business owner or company) to use his goodwill as collateral to secure a debt, generally within the framework of a professional amortizable loan . This guarantee, defined by article L142-1 of the French Commercial Code , aims to secure the repayment of a debt.
Unlike the real estate mortgage , the pledge only concerns the business assets, an intangible asset which brings together several elements essential to the operation of a commercial or craft activity.
This mechanism is particularly popular with banks or other credit institutions when it comes to granting significant financing to entrepreneurs. In the event of default by the debtor, the secured creditor has a priority right to reimburse himself through the forced sale of the business.
Pledges of business assets: Definition and formalities
Good news!
In France, entrusting your accounting to an accountant is not a legal chinese overseas europe data obligation! In other words, you can definitely turn to online accounting software to support you… like Indy for example! Track your cash flow, complete your mandatory accounting declarations, open a pro account, and much more, with Indy.
I register
In summary: The pledge of goodwill is a real guarantee which makes it possible to secure a debt by pledging the goodwill for the benefit of a creditor;
In the event of default of payment, the creditor may request the forced sale of the assets to recover his debt, with a right of priority;
The pledge may be conventional (agreement between the parties) or judicial (imposed by a judge);
The elements of the business that can be pledged include in particular the trade name, the right to the lease, the clientele, and the equipment, but not the stocks or the debts.
Pledge of business assets: What is it? Definition
The pledge of goodwill is a real guarantee allowing a debtor (business owner or company) to use his goodwill as collateral to secure a debt, generally within the framework of a professional amortizable loan . This guarantee, defined by article L142-1 of the French Commercial Code , aims to secure the repayment of a debt.
Unlike the real estate mortgage , the pledge only concerns the business assets, an intangible asset which brings together several elements essential to the operation of a commercial or craft activity.
This mechanism is particularly popular with banks or other credit institutions when it comes to granting significant financing to entrepreneurs. In the event of default by the debtor, the secured creditor has a priority right to reimburse himself through the forced sale of the business.