Sunday, December 09, 2018

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Questions and Answers

How can data on registered rights of pledge be accessed?
Answer:

Any interested party can access data contained in the Pledge Register through the Agency’s Internet page or at the Agency’s offices during its business hours.

Detailed instructions on how to search the data contained in the Register can be found in the section "Instructions for Data Searches".

The amount of fees of the Pledge Register?
Answer:

The fees of the Pledge Register are prescribed by the Decision on Fees for Registration and Other Services Provided by the Serbian Business Registers Agency ("Official Gazette of the Republic of Serbia", No. 119/2013, 138/2014, 45/2015, 32/2016 and 30/2016), which is posted on the Agency’s Internet page, Pleadge Register, in the "Laws and By-laws" section.

For detailed information about the types, amount and method of payment, see the "Fees" section.

Who pays for the registration costs?
Answer:

The applicant or other interested legal or natural entity, pays for the costs of registration in the Pledge Register, in accordance with the Decision on Fees for Registration and Other Services Provided by the Serbian Business Registers Agency ("Official Gazette of the Republic of Serbia", No. 119/2013, 138/2014, 45/2015, 32/2016 and 30/2016),

The representative of the company, the proxy by employment and the procurator cannot act as the other contracting party or enter into contracts with the company on their own behalf and for their own account, on their own behalf and for the account of another person, or on behalf of and for the account of another person, without special authorization.

The authorization referred to in paragraph 1 of this Article shall be given by the decision of the partners, the complementary, or the the general meeting, unless otherwise determined by the Memorandum of Association or the Articles of Association.

The limitation referred to in paragraph 1 of this Article shall not apply to the legal representative who is at the same time the sole member of the company.

Where can the application forms for registration of the right of pledge be obtained?
Answer:

Application forms for registration of the right of pledge (amendments to data on the right of pledge, annotations, deletions, as well as excerpts/certificates) are available on the Internet page of the Serbian Business Registers Agency.

Detailed instructions on how registration applications are submitted can be found in the section "Instructions".

What is a pledge?
Answer:

A pledge is a means of securing own or another’s debt with movable assets or rights, without transfer of possession, with registration in the Pledge Register.

How does the right of pledge arise?
Answer:

The right of pledge arises by conclusion of an agreement (contractual right of pledge), in the enforcement proceedings – by agreement before the court, by forced execution of an executive or authentic document, or by pronouncing a provisional measure (judicial right of pledge) and in the tax procedure before commencement of forced collection, or during forced collection of tax arrears (statutory right of pledge).

Form and contents of the pledge agreement?
Answer:

The agreement must be concluded in the written form and contain the material elements prescribed by the Law (date of conclusion, name and surname or company name, place of permanent or temporary residence, or registered office of the pledgee, pledger and debtor, object of pledge and data on the claim secured by the pledge).

Who is the Pledgee?
Answer:

The pledgee is the person who has right of pledge over a movable asset or right which is the object of pledge.

Who is the Pledger?
Answer:

The Pledger is the person who has right of ownership of a movable asset, or the capacity of holder of a right of which he/she may dispose freely.

Who is the third party referred to in Article 16, paragraph 1 of the Law?
Answer:

One or more pledgees may authorize a third party or one of the pledgees to take legal action to protect and settle the claim secured by a pledge. In such cases, the authorized person is registered in lieu of the pledge creditors, as the person who has pledgee’s rights in relation to the pledger.

Who is an interested party?
Answer:

An interested party is a party with legal interest (other than the pledger and the pledgee) to have an annotation entered in the Pledge Register of the existence of a dispute pertaining to the pledged movable assets or other relations of the parties in connection with the pledge, or to have data deleted from the Register.

The amount up to which the principal claim is secured?
Answer:

This is an amount expressed in domestic or foreign currency up to which the claim is secured (principal claim).

Maximum amount of secured claim?
Answer:

This is an amount expressed in domestic or foreign currency which comprises the principal debt, interest and costs of debt collection. This is a compulsory element in registration of the right of pledge.

Debt maturity date?
Answer:

The day by which the debtor is obliged to settle his/her debt.

What is the object of pledge?
Answer:

It is a movable asset or right.

Since when has the Pledge Register been kept?
Answer:

The Business Registers Agency has kept the Register of Pledge of Movable Assets and Rights (the Pledge Register) since August 15, 2005.

Why is it important to register the pledge?
Answer:

The order of priority in which the pledgees’ claims will be settled from the value of the pledged asset is determined by the time (day, hour and minute) of the receipt of applications for registration of the right of pledge by the Agency.

Once a pledge right is registered, nobody can claim ignorance of the data contained in the Register.

How is right of pledge acquired?
Answer:

Right of pledge is acquired by registration in the Pledge Register, unless otherwise stipulated by another law.

When can the pledge right be acquired?
Answer:

The contractual, judicial and statutory pledge right is acquired with registration in the Pledge Register.

Does registration of the pledge constitute proof of the right of ownership of the object of pledge?
Answer:

Registration of the right of pledge in the Pledge Register does not constitute proof of ownership or other rights of the pledger over the pledged movable assets, or that the secured claim or pledge is valid.

Can third parties plead ignorance of the existence of the right of pledge?
Answer:

It is assumed that the existence of right of pledge is known to third parties on the grounds of its registration in the Pledge Register. Nobody may plead ignorance of the data from the Pledge Register.

Excerpt from the Register?
Answer:

An excerpt from the Register is a public document containing all registered information on a particular pledge right (excerpt by the submission number - ”Zl.broj‟). Such an excerpt has the power of an executive document.

What is a certificate from the Register?
Answer:

The certificate is a public document confirming that a certain movable property is registered as the subject of the pledge, or that a certain person is registered as the pledger, stating the basic data on the registered pledge right or confirming that a certain movable property is not registered as the subject of the pledge, or that a certain person is not registered as the pledger.

The certificate is also issued when it is necessary to confirm that data or a document was registered, or that the Register contains a specific document.

Does the excerpt from the Pledge Register have the status of an executive document?
Answer:

Yes, Article 13 of the Law on Enforcement and Security prescribes that the excerpt from the Pledge Register has the status of an executive document.

In order to settle the secured claim, the pledge creditor is obliged to register the annotation of the commencement of the settlement procedure, and the settlement procedure shall begin when the pledge creditor delivers a notice of intention to settle his overdue claim to the pledger and the debtor, when it is not the same person.

What happens when the excerpt from the Register contains no records on the maturity date?
Answer:

When the maturity date cannot be established on the basis of an excerpt from the Register, and the pledgee wants his claim settled, he is required to submit written evidence within the enforcement procedure, along with the excerpt and pledge agreement, corroborating that he has requested the enforcement debtor to settle his debt within a subsequently set deadline.

What is a provisional right of pledge?
Answer:

In an order imposing a provisional remedy in favor of the enforcement creditor, the court may grant the creditor provisional right of pledge. This right is in force until the expiry of the provisional remedy and can be registered in the Pledge Register, at the request of the enforcement creditor.

What constitutes legal grounds for data registration in or deletion from the Register?
Answer:

Legal grounds for registration are documents enclosed with the application, on the grounds of which data is registered in or deleted from the Register (agreement, agreement before the court, court decision, records of inventory and assessment, and the like).

How is the procedure of registration in the Register initiated?
Answer:

The procedure of registration of the right of pledge in the Register is initiated by filing a registration application.

The application is submitted on the prescribed form, which is available on the Internet page of the Agency, the Pledge Register, in the section "Forms".

Who submits the registration application for registration of the judicial pledge right?
Answer
:

The provisions of Article 227 of the Law on Enforcement and Security prescribe the obligation of the enforcement creditor to register the pledge right, because it is established in his interest.

What is the deadline for submitting the registration application?
Answer:

The applicant is obliged to submit the application within 15 days from the date of creation of the data or the document that is the subject of registration, or the change of the registered data or document, unless another deadline has been prescribed by law. For the application submitted after expiry of the statutory deadline, the amount of fee for conducting the registration procedure shall be increased by the amount prescribed by the act regulating the fees charged by the Agency for its services.

How long does it take to make a decision on the registration application?
Answer:

The deadline for deciding on the registration application is five days. The decision of the Registrar shall be published on the Agency’s website at the same time as its adoption.

What are the consequences of failing to decide on the registration application within a deadline?
Answer:

If a decision on the application is not made within five days of its receipt, it is considered that the application has been adopted on which a decision is made, and the requested registration is carried out in the Pledge Register, except in case of lack of jurisdiction, when the registration of the data or the document, which is not the subject of registration or is already registered, is requested.

What decisions does the Registrar make in the registration process?
Answer:

If the conditions for registration have been met, the Registrar shall issue a decision adopting the application. If the conditions for registration have not been met, the registration application shall be rejected by a decision.

Is the Registrar’s decision delivered to the applicant?
Answer:

Delivery of a written copy of the Registrar’s decision shall be made at the applicant’s explicit request. Otherwise, the applicant will be able to get acquainted with the decision on the application through the Agency’s website.

What are the reasons for the application to be rejected and what is the priority right?
Answer:

The conditions for registration are prescribed by Article 14 of the Law on Procedure of Registration with the Serbian Business Registers Agency, and the content of the register and documents required for registration are prescribed by the Rulebook on the content of the Register of Pledges on Movable Property and Rights and documents required for registration.

If the Registrar determines that the application has been submitted by an unauthorized person, that the application does not contain the data and facts required for registration, that the prescribed documents have not been enclosed with the application, that the facts from the application do not comply with the facts from the enclosed documents and the data that are registered in the Register and/or the proof of payment of the prescribed fee has not been submitted with the application, s/he shall issue a decision rejecting the application and determine which conditions for registration have not been met. If the applicant, within 30 days from the date of publication of the decision rejecting the application, submits a new registration application, removes the identified shortcomings and pays half the amount of the prescribed registration fee, he shall reserve the decision-making priority right based on submission of the rejected application. When submitting a new registration application, the applicant must invoke the right of priority by indicating the number of the application that has been rejected. If the applicant does not invoke the right of priority or does not indicate the number of the application that has been rejected, the application shall be considered as a completely new registration application.

Can a complaint be filed, while at the same time invoking the decision-making priority right based on the previously submitted rejected application?
Answer:

If the applicant files a complaint against the decision rejecting the registration application by determining the conditions for registration that have not been met, and at the same time eliminates the shortcomings identified by the decision, it shall be considered that the actions undertaken to eliminate the identified shortcomings have not been undertaken, meaning that the complaint proceeding shall continue.

Who can file a complaint, within which deadline and to whom is the complaint filed?
Answer:

The provision of Article 25, paragraph 1 of the Law on Procedure of Registration with the Serbian Business Registers Agency prescribes that the applicant may file a complaint against the decision of the Registrar to the Minister in charge of deciding on the complaint, through the Agency, within 30 days from the date of publication of the decision.

The Law on Pledge of Movable Property Registered in the Pledge Register in Article 5 prescribes that the registration of a pledge right in the Pledge Register may be requested by the creditor or the pledger, and if the registration is requested by the creditor, an explicit statement by the pledger is required by which he agrees that the creditor may register the pledge right in the Pledge Register.

The subject of the Law on Procedure of Registration with the Serbian Business Registers Agency is regulating the procedure of registration, recording and publishing of data and documents that, in accordance with the special law, are the subject of registration, recording and publication in the registers and records kept by the Business Registers Agency, as well as other issues of relevance for registration, recording and publication. In cases where issues relating to registration and recording procedure are not specifically regulated by the Law on Procedure of Registration with the Serbian Business Registers Agency, in accordance with Article 4 of the same law, the General Administrative Procedure Act shall apply accordingly.

Since the Law on Procedure of Registration with the Serbian Business Registers Agency prescribes that registration represents an entry, change or deletion of data and documents in the registers kept by the Agency, that the applicant is a person authorized to submit the application, thus, pursuant to Article 5 of the Law on Pledge of Movable Property Registered in the Pledge Register, the applicants for registration of the pledge right (creditor and pledger) are, at the same time, also persons authorized to file a complaint against the decision of the Registrar, in accordance with the provision of Article 25 paragraph 1 of the Law on Procedure of Registration with the Serbian Business Registers Agency (decision of the Supreme Court of Cassation of the Republic of Serbia Uzp 506/2016 of 02.03.2017).

What is the legal basis for registering or deleting data from the Register?
Answer:

The legal basis for registration are the documents that are enclosed with the registration application and on the basis of which the registration or deletion of data from the Register is performed (contract, court agreement, court decision, inventory and appraisal record, etc.). The Rulebook on the content of the Register of Pledges on Movable Property and Rights and documents required for registration prescribes individual documents required for a particular type of pledge (contractual, judicial and statutory pledge).

What is the legal basis for registering the amendment of the registered pledge right?
Answer:

Annex to the pledge contract, for example, constitutes the legal basis for the registration of data on the amendment of the already registered pledge contract. Each amendment has the character of a new entry into the Register.

In addition to the annex to the contract, the annotation in the continuation of the record on data inventory from the subsequent enforcement order for the collection of other claim of the same or some other enforcement creditor, also constitutes the legal basis for registering the amendment of the registered pledge right.

The decision of the competent state authority amending the decision that was the basis for registration, or some other appropriate document from which it can be established that the change of registered data has been made, also constitutes the legal basis for registering the amendment of the registered pledge right.

What is the legal basis for strike-off of pledge rights from the Register when the pledged asset is sold at an out-of-court public auction and the proceeds from the auction are insufficient to settle the claims of the second-priority pledge creditor, and other later-in-time creditors, in other words is it sufficient to submit a Sale Contract or is it also necessary to submit a consent for the strike-off of lower-ranking pledge creditors?
Answer:

Article 53, paragraph 1 of the Law on Pledges of Registered Movable Assets (Official Gazette of RS, No 57/06, 61/05) stipulates that a right of pledge expires on the grounds of public auction and other type of sale of the pledged assets, executed in order to settle the claim of the pledge creditor, while paragraph 3 of the same Article prescribes that in the case of out-of-court auction the pledge creditor is required to issue a document based on which the pledger may request the strike-off of the right of pledge. The buyer of the pledged asset sold at an extrajudicial auction also has the right to request the pledge creditor to issue such a document, pursuant to Article 53, paragraph 4 of the same Law.

Bearing in mind all of the aforesaid legal provisions, to clear all pledge rights in a concrete situation, all pledge creditors are required to submit a written statement of consent to the strike-off of pledge rights, as the legal grounds for strike-off, in all cases.

Is the pledger’s consent required for registration of the pledge?
Answer:

The pledger’s consent to registration of the right of pledge in the Pledge Register is required only for the pledge arising from an agreement. If the pledger is a natural person, and the application for registration in the Pledge Register is filed by the pledgee, the pledger’s statement to the effect that he/she consents to the registration of the right of pledge in the Pledge Register by the pledgee must be certified by a body competent to authenticate signatures.

When is the Tax Administration obliged to request deletion?
Answer:

Following the settlement of tax debt by forced collection, the Tax Administration is obliged to request deletion of the right of pledge within two days. When the tax becomes payable at regular intervals, i.e. several times per year, deletion must be requested at the latest within ten days from the expiry of the year in which it was established.

When should the registration application for deletion of the pledge right be submitted?
Answer:

When the debt is repaid or the claim ceases in some other way, the pledger, the pledge creditor and the debtor may submit the registration application for the deletion of the pledge right.

Who should submit the registration application for entering the annotation of commencement of the settlement procedure?
Answer:

The pledger is obliged to enter in the Pledge Register that the settlement procedure has commenced. After that, the pledger is obliged to allow the creditor to settle from the subject of the pledge right.

Can the registration application be submitted by a proxy?
Answer:

A third person that is authorized for representation (proxy) can submit the application for registration. In addition to such application, the proxy must submit the power of attorney for representation. If the proxy is not a lawyer, and a natural person is the one giving the authorization, the power of attorney must be certified by the authority responsible for the certification of signatures.

Who can submit the application for registration in the Register?
Answer:

The application for registration of the pledge right can be submitted by the pledge creditor or the pledger. The debtor cannot submit the application for registration.

Does the pledger’s statement by which he agrees that the creditor may register the pledge right in the Register need to be certified?
Answer:

If the pledge creditor submits the application for registration of the pledge right, it is necessary to submit a statement by which the pledger agrees that the creditor may register the pledge right in the Register. This statement may be included in the text of the contract itself, or it may be a separate document. Only in the situation where the pledger is a physical person, the statement must be certified by the authority responsible for the certification of signatures, whether it is made as a separate document, or it is included in the contract itself.

Can a pledge created after the initiation of bankruptcy proceedings be registered?
Answer:

A right of pledge (statutory and court) cannot be registered when bankruptcy proceedings have been instigated against the debtor (pledger) after the inventory and evaluation of movable property and before the submission of the application for registration. Pursuant to Art. 80, para. 2 of the Bankruptcy Law (Official Gazette No 104/09), once bankruptcy proceedings are initiated, the secured right can only be exercised within the bankruptcy proceedings, except in cases when a decision has been made to suspend the injunction against enforcement and collection pursuant to this Law. Article 93, paragraph 1 of the aforesaid Law stipulates that from the start date of bankruptcy proceedings, neither the insolvent debtor, nor his property may be subject to enforced collection, or any other measures foreseen within the enforcement proceedings, with the exception of those related to the liabilities of the bankruptcy estate and costs of the insolvent debtor.

The same applies to contractual right of pledge, as all of the creditor’s rights are to be exercised within the bankruptcy proceedings.

Can the object of pledge be pledged several times?
Answer:

One movable asset – object of pledge can be pledged several times, and the fact that the right of pledge is not registered in the Pledge Register does not mean that there is no other right of pledge over the same asset.

Can fixed assets be the object of pledge?
Answer:

Fixed assets can be the object of pledge because the pledger remains in possession of them. The pledge does not constitute an impediment to conducting regular commercial activities.

Can the subject of the pledge right be a claim based on a VAT refund request?
Answer:

The claim right on the basis of tax refund can be the subject of the pledge, as well as any claim that is not related to a person or that cannot be transferred to anyone else, or the transfer of which is not prohibited by law. This right to VAT refund must be determined by a decision as the taxpayer’s tax refund claim in accordance with the Value Added Tax Act and the Rulebook on the procedure for exercising the right to VAT refund and on the manner and procedure of VAT refaction and refund.

Can a claim under an insurance contract be pledged?
Answer:

A claim under an insurance contract may be pledged, either as a future or existing claim. With future claims, the insured event has not occurred yet, and the pledgee acquires the right of pledge over the insured amount only when the insured event has occurred. If the pledger has a claim towards the insurance company, arising as a result of the occurrence of the insured event, the pledge is established by stipulating a pledge contract and registering in the Pledge Register, as this is an existing claim.

Can money deposited in the bank be pledged?
Answer:

Money deposited on a bank account can be pledged, but only up to the existing amount, i.e. balance at the date of registration of the pledge. The specification principle requires that the pledged asset be accurately specified or at least definable. Consequently, only an individually specified asset or claim can be pledged.

Can a claim under a bank guarantee be pledged?
Answer:

Тo the Opinion of the Ministry of Economy and Regional Development – Sector of administrative and supervisory affairs in the area of business registers No 300-06-00-80/2011-09 оf May 20, 2011, a claim under a bank guarantee, for both ordinary and “first call”, i.e. “no objection” guarantees, may be pledged as a future claim, because a claim under a bank guarantee only arises when the conditions for payment under a guarantee are met.

Is registration of changes to a pledged share in a company required in the case of recapitalization of the company?
Answer:

When the pledged asset is a company share, the recapitalization of the company is of no relevance for the registration of changes relating to a pledged asset. The share is proportional to the contribution, so the increase in capital also extends to the share, i.e. the pledge. Consequently, recapitalization does not have to be registered as a change in the pledged asset.

When does the representative of the company, the proxy by employment and the procurator need special authorization to represent the company?
Answer:

Designated persons may not act as the other contracting party and enter into contracts with the company on their own behalf and for their own account, on their own behalf and for the account of another person, or on behalf of and for the account of another person, without special authorization. In such a situation, it is necessary to submit the authorization to undertake such an action, which is given in the form of a decision of the partner, the complementary, or the assembly or otherwise stipulated by the Memorandum of Association or the Articles of Association (Article 42 of the Companies Act). This limitation shall not apply to the legal representative who is at the same time the sole member of the company.

Does the pledge of shares require prior consent from the company?
Answer:

When submitting a request for registration of the pledge right, it is necessary to enclose a written statement of the legal representative of the company whose shares are pledged of whether the company’s Memorandum of Association stipulates the obtaining of a consent from the company for the pledge, or for the transfer of shares to a third party, and whether it has been obtained, all in accordance with Article 177 of the Companies Act (“Official Gazette of the Republic of Serbia”, No. 36/11).

Does the pledge contract have to be certified?
Answer:

The pledge contract does not have to be certified. The certified form of the pledge contract is requested only in exceptional cases, or when prescribed by special regulations.

A certified form is required in the contracts on the pledge of shares.

Can the subject of the pledge be a telecommunication network, an electricity network, or an oil or gas pipeline network?
Answer:

A telecommunication network, that is an electricity network, an oil or gas pipeline network, cannot be the subject of the pledge that is registered in the Register of Pledges on Movable Property and Rights. The telecommunication network, or other networks represent a real estate, that is, lines with the associated devices and installations (whether they are above ground or underground), in the sense of the Law on State Survey and Cadastre (“Official Gazette of the Republic of Serbia”, Nos. 72/09, 18/10) and are registered in the Lines Cadastre. However, devices that are built on the lines and which enable the operation and proper use of the lines, which can be separated from the line without its destruction or significant damage, are considered movable property and can be the subject of the pledge right.

Is it possible to pledge large-value assets?
Answer:

For the disposal of large-value assets (over 30% of the book value) it is necessary that the company general meeting gives a prior or subsequent approval of such disposal.

Should the approval of the ministry responsible for privatization be submitted for the registration of the pledge right on the assets of a company that operates with a majority capital that is socially owned?
Answer:

If a company operates with a majority capital that is socially owned, it cannot make decisions on the pledge of assets, which are not part of regular operations, without the prior approval of the ministry responsible for economic affairs.

How to register a contract on assignment of claims after the bankruptcy proceeding has been instigated against the pledger?
Answer:

Contract on assignment of claims, factoring contract, etc., can only be registered through the annotation of importance for legal transactions, which indicates that after the bankruptcy proceeding has been instigated, a change has occurred, that is, the pledge creditor has assigned his claims secured by the pledge to another person. Registration of the change of the pledge creditor is not possible, since Article 80, paragraph 2 of the Bankruptcy Law (“Official Gazette of the Republic of Serbia”, No. 104/09) prescribes that a separate satisfaction right is exercised exclusively in a bankruptcy proceeding.

Can the pledge right be registered after a decision on restructuring has been made?
Answer:

Until the implementation of the procedure for the sale of the subjects of privatization that were in the process of restructuring on the day of 13.08.2014, the subjects of privatization cannot make decisions regarding the disposal of movable property or the pledge of property without the consent of the ministry responsible for economic affairs, in accordance with Article 93, paragraph 3 of the Law on Privatization (“Official Gazette of the Republic of Serbia”, Nos. 83/14, 46/15, 112/15 and 20/16-authentic interpretation), in conjunction with Article 11 of the Decree on Procedure and Method of Restructuring the Subjects of Privatization (“Official Gazette of the Republic of Serbia”, Nos. 52 / 05, 96/08, 98 / 09,44/13 and 59/13).

  
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