I. Mortgage of production equipment, raw materials, work in process and finished products

The mortgage of production equipment, raw materials, work in process, and finished products means that a debtor or a third party leaves its legally owned production equipment, raw materials, work in process, and finished products to the creditor as mortgages in order to secure the performance of the debt.

If the debtor fails to perform his obligations due or any event upon which a security interest in the mortgaged property is to be enforced as agreed by the parties occurs, the creditor has priority to be paid from the movable property determined at the time when the mortgaged property is ascertained. A mortgage on movable property shall be created at the time when the mortgage contract enters into effect; without registration, such a mortgage may not be asserted against a bona fide third person.

II. Pledge of Accounts receivable

The account receivables pledge refers to the pledge of the legally owned account receivables by the debtor or a third party to the creditor in order to secure the performance of the debt.

If the debtor fails to pay the due debt or the pledge right is realized as agreed by the parties, the creditor shall have the right to get the priority of compensation for the account receivables and its income.

The pledge right established on account receivables shall be registered, and the pledge right shall be established at the time of pledge registration.

III. Pledge of certificates of deposits, warehouse receipts and bills of lading

Pledge of certificates of deposits, warehouse receipts and bills of lading refers to the pledge of legally owned certificates of deposits, warehouse receipts and bills of lading by the debtor or a third party to the creditor to secure the performance of the debt.

If the debtor fails to pay the due debt or the pledge right is realized as agreed by the parties, the creditor shall have the right to get the priority of compensation for the right.

If the certificates of deposits, warehouse receipts and bills of lading are pledged, the pledge right shall be established when the certificate of right is delivered to the pledgee; if there is no certificate of right, the pledge right shall be established at the time of pledge registration.

IV. Finance Lease

Finance Lease registration is chiefly targeted at finance lease transactions. Finance lease refers to a form of transaction when the lessor purchases the asset (lease) selected by the lessee and provides such asset for the use by the lessee who pays rents.

Through lease registration, the lessor can establish and make public clear ownership of the leased asset in order to protect his/her rights. A third party may seek for information from the financial registry to know the rights status of the leased property in order to avoid transaction risks.

V. Factoring (Transfer of Accounts Receivable)

Factoring registration is chiefly targeted at the transfer of receivables in factoring business. In factoring business, the creditor of account receivables transfers account receivables to banks or factors to obtain funds, which is in nature a transfer of creditor’s rights.

An account receivable registry helps to make the transaction more transparent, avoiding any rights conflict that may arise from the pledge of a transferred account or the transfer of a pledged account. Therefore, transaction safety is guaranteed.

VI. Retention of Title

Retention of title usually refers to a kind of commercial agreement with certain conditions placed on the buying and selling relationship between the seller and the buyer. These conditions typically stipulate that the buyer may occupy a certain movable property first although he/she may only obtain the ownership of the subject matter only after making the payment under the contract in full or after he/she has met certain other conditions.

The retention of ownership registration aims at avoiding possible rights dispute caused by the situation where the occupant and the owner of the movable property are not the same party. Retention of ownership are most seen in transactions when instalment payments are involved.

VII. Other types

Registration for other types of secured transaction comprises mainly the situation where the occupant and the owner of the subject matter in movable secured transaction are not the same party, and the obligees should make public the property’s ownership status but could not find legal registry. Third parties may access information on the status of certain security over movables in the Registration System and thereby avoid any potential rights conflict.

Users should choose a specific secured transaction type according to the nature of the transaction. If the six aforementioned types are registered as other types, it may affect the effectiveness of the registration, and the risk shall be borne by the party initiating the registration.