Each form of security has its set of rules for creation, perfection, registration and enforcement, and sometimes even the same form of security is governed by different rules depending on the type of assets subject to security.
Mortgages must be signed before a notary public and registration of security with the competent land registry (or the asset-specific registers for vehicles, ships, aircraft etc) is required not only for the ranking of the security but as an essential requirement for the validity of the security. The mortgage is subject to registration tax (fixed or ad valorem) and mortgage tax (equal to 2 per cent of the amount secured).
As a general rule, pledges require a written agreement, an undisputable date of the agreement and delivery of the pledged assets to the pledgee (or a custodian) for security purposes. In order to obtain an undisputable date, the document is usually executed before a notary public, but other methods are available. The delivery of the pledged assets has the dual function of further strengthening the creditor’s right against the pledgor and ensuring the publicity of the security with regard to third parties. Depending on the nature of the assets subject to pledge, delivery can be achieved in different ways.
Italian limited liability companies mainly belong to two categories: an SpA or Srl. While the equity in SpAs is divided up into shares of equal par value, represented by registered share certificates (unless in dematerialised form), equity in Srls is not divided into shares and each equity holder is the owner of a percentage (quota) of the entire equity of the company. As a result, delivery of the pledged asset (and, therefore, perfection of security) is achieved through the transfer by way of security of the certificates representing the shares in an SpA or by registering the pledge in the competent companies’ registry in the case of quotas in an Srl. In each case, the pledge must be recorded in the company’s shareholders’ book (if any) in order for it to be enforceable against the company. Owing to the requirement for registration with the competent companies’ registry, a pledge over quotas in an Srl must be signed before a notary public and it is subject to registration tax (unless exempt). Registration of the pledge over the shares in an SpA is not required; therefore, registration tax is only applicable in certain circumstances.
Pledges over intellectual property rights (eg, patents, designs, trademark registrations and trademark applications) must be signed before a notary public and are subject to registration taxes (unless exempt). Delivery of the pledged asset or perfection of security is achieved by registration of the pledge with the competent intellectual property right registry and court offices.
For pledges over receivables, claims and bank accounts, delivery or perfection is achieved by notification of the pledge to the relevant debtor (or account bank) or acceptance of it by the latter. In both cases, an undisputable date of the notice or acceptance is required for enforceability against third parties (including the receiver or liquidator of the pledgor). An undisputable date of the notice is generally achieved by service of the notice by a court bailiff, through a piego raccomandato aperto or by certified email (PEC), an undisputable date of the acceptance is generally achieved by execution of the acceptance before a notary public. In relation to these classes of assets, registration of the pledge is not required; therefore, registration tax is only applicable in certain circumstances.
The assignment by way of security is an alternative to the pledge as a security in relation to receivables. On the one hand, similarly to the pledge over receivables, it also requires a written agreement bearing an undisputable date and that the security document clearly identifies the receivables subject to security. Contrary to the pledge, on the other hand, the notification to the assigned debtor (or its acceptance) is only a requirement for the enforceability of the assignment with regard to third parties, as opposed to a perfection requirement of the security. In other words, an assignment by way of security of receivables is a valid security between the parties from the date of the agreement, irrespective of the notification to or acceptance by the debtor. This difference makes the assignment a more flexible security and, as a result, it is more commonly used in the Italian market, as opposed to the pledge. In fact, for a number of commercial and practical reasons, in many circumstances the assignor or pledgor may not be willing to notify its debtors of the security and, with the assignment by way of security, the notice can be postponed to a later time (eg, event of default) in order to minimise the burden of the security for the company, without affecting the validity of the security interest. However, it must be stressed that the enforceability against third parties (including any receiver or liquidator of the company) requires notice of the assignment. The notice can be served at any time before the insolvency of the pledgor without jeopardising the security, since the relevant hardening period starts running from the date of the agreement, whereas, in the case of the pledge, the relevant hardening period only runs from the date of the notice.
Special privileges must be signed before a notary public. A list of all equipment, plant, machinery, raw materials, work-in-progress, finished goods, livestock, merchandise and any other goods and claims subject to security must be included in the security document, which must also specify the maximum amount secured thereunder. The security document must then be lodged with the specific registry held at the competent court. The special privilege is subject to a registration tax of €200.
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