Pledge as security for financing

11 April 2023 | Knowledge, News, The Right Focus

In the current economic situation and with inflation constantly on the rise, companies are increasingly looking for external financing to maintain their business at its current level or to ensure continued growth. Clearly, finance providers have quite far-reaching requirements for securing return of their funds. In practice, one of the most commonly used types of security is a registered pledge over the shares or assets of the borrower.

Registered pledges – advantages and benefits

A registered pledge is a limited right in rem and a basic security on movables and transferable property rights.

Under this pledge, the encumbered thing generally remains in the possession of the pledgor, and the creditor may enforce their claims regardless of who owns the thing, with priority over personal creditors of the owner (although there are certain exceptions in this respect).

A registered pledge owes its name to the fact that it is established via an entry in the register (which distinguishes it from other pledges existing under Polish law). This entry is decisive for the establishment of the pledge right and renders the right effective towards third parties – so, in general, no one can claim ignorance of an entry in the pledge register.

Clearly, this security is so popular because of its advantages. And this is true both from the perspective of the borrower and the finance provider. Benefits include:

  • Simple straightforward establishment procedure – it is enough to execute a pledge agreement (which must be in writing to be valid) and register the pledge using an official form
  • Low cost of establishing a registered pledge (the registration fee is only PLN 200)
  • Public availability of information (the pledge register is kept by district courts, which provide information on the establishment of a registered pledge on the assets of a given entity)
  • Possibility for the finance provider to secure interest, incidental dues and costs.

Pledge agreement – practical aspects

When negotiating and entering into a registered pledge agreement, the legislator has left certain aspects of the agreement open for modification. As such, it is important to ensure that your needs and your preferred relationship with the other party are tailored into the agreement, in matters such as:

  • Provisions introduced whereby the pledged item may, under certain conditions, become the property of the pledgee
  • Restrictions imposed on the disposal and further encumbrance of the pledged item
  • The pledgee being satisfied through a public tender in which the pledged item is sold
  • In certain cases the pledgee may be granted voting rights at the shareholders’ meeting in the case of a pledge on shares
  • The pledgee being satisfied from the income of the company.


A registered pledge is clearly one of the best ways to secure claims.

However, it is important to remember that it is essential to tailor the wording of the registered pledge agreement to your needs, as this will significantly affect your entitlements, both in respect of the pledged property and of the other party. If you need support in drafting and negotiating a registered pledge agreement, feel free to contact us.

Questions? Contact the authors

Dominik Karkoszka

Adam Czarnota


See also
The term of office and the moment of expiry of the mandate of an LCC management board member

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Contact us:

Rafał Rapala

Rafał Rapala

Attorney at Law, Partner, Head of Corporate Practice, Shareholders Conflicts

+48 608 444 650

Dominik Karkoszka

Dominik Karkoszka

Attorney at Law, Senior Associate

+48 608 317 340

Adam Czarnota

Adam Czarnota

Advocate, Senior Associate

+48 787 389 207