Record and cancel an encumbrance
An encumbrance is recorded from the profile of the shareholder whose shares it affects, with "Add encumbrance", in two steps: the encumbrance details (type, dates, numbering and deed) and its participants. When it is lifted, its end date is recorded.
Before you start
- The document that creates the encumbrance: the pledge deed, the usufruct title, the option agreement, the attachment order.
- Which shares it affects, with their numbering: from share X to share Y.
- Who the other parties are: the creditor, the usufructuary, the co-owners, the option holder.
Record an encumbrance#
- Open the shareholder's profile. From the shareholder list, click the name of the holder of the shares.
- Click "Add encumbrance". It is in the "Encumbrances and co-ownership on these shares" block, in the "Summary" tab. You can also click on the range you want to encumber, in "Share ranges". The encumbrance dialog opens, in two steps.
- Choose the "Encumbrance type". "Co-ownership", "Pledge or security", "Usufruct", "Attachment", "Transfer restrictions", "Call or put options", "Shareholders' agreements", "Tax liens", "Registry entries", "Trusts" or "Other".
- Enter the dates. The "Start Date" and, if the encumbrance has a term, the "End date". Co-ownership does not normally have an end date.
- Enter the exact shares. In "From no." and "To no.", the numbering it encumbers; "Affected shares" is the count. If the encumbrance covers only part of their shares, enter only that part.
- Fill in the deed and the notary details, and click "Continue".
- Add the "Participants" and save. Who holds the right: the creditor, the usufructuary, the option holder or the other co-owners. The encumbrance appears on the profile with the status "Active".
If the encumbrance arises from an operation, for example a share transfer in which the shares are pledged, you can add it when recording the operation, without going through the profile.
If you have many encumbrances to add at once, the shareholder list also has "Upload encumbrances", to load them from a file.
Check the numbering against the document. An encumbrance recorded on the wrong shares encumbers the wrong person. The numbering you enter must be the one stated in the deed.
Cancel an encumbrance#
When the debt is paid, the usufruct ends or the option expires, the encumbrance is not deleted: it is edited to record that it has been cancelled. That way the history of what existed over those shares is kept.
- Open the encumbrance from the shareholder's profile and edit it.
- Enter the "End date". If you have it, attach the document that proves the cancellation: the payment receipt, the cancellation deed.
What happens next#
- The encumbrance is no longer "Active" and no longer counts towards the shareholder's encumbered shares.
- If it was the only one of its type, the shareholder leaves the corresponding system category: Co-owner, Usufruct or Other encumbrances.
- The encumbrance stays on the profile as history, with its dates.
Frequently asked questions#
The encumbrance's term has already passed. Do I need to do anything?
Yes. The end date having passed does not mean it is cancelled: until you edit the encumbrance to cancel it, it remains recorded and a third party can rely on it. Cancel it as soon as you have the document.
Can I record an encumbrance on part of a shareholder's shares?
Yes, and that is the usual case. Enter only the affected numbering. The rest of their shares remain free.
Does the shareholder see the encumbrance?
They see the encumbrances on their shares on their own profile, in the "Encumbrances and co-ownership on these shares" block. We explain this in See your position in the company.
Related
- Encumbrances on shares: usufruct, pledge, co-ownership and option An encumbrance is another person's right over some shares: a usufruct, a pledge, an attachment or a call option. Co-ownership is recorded in the same place even though it is not an encumbrance: the shares belong to several people at once. In Sttok each one is recorded against the specific shares it affects, with its dates and its status, on the shareholder's profile.
- Group shareholders with categories Categories are labels the company puts on its shareholders, such as "Founders", "Investors" or a family branch, to group them and find them together. There are also three categories that Sttok assigns on its own from encumbrances: Co-owner, Usufruct and Other encumbrances.
- Share classes and numbering A class groups the shares that carry the same rights: how many votes they give, their nominal value and whether they have preferences or restrictions. Each share also carries a number, and knowing which numbers belong to whom is what makes it possible to transfer specific shares.