Equity Transfer Guarantee under the Civil Code

Kaili Liu

International Journal of Social Science Studies, 2024, vol. 12, issue 5, 55-61

Abstract: Equity transfer guarantee is the frustration cost generated by the principle of numerus clausus of real rights. Because the legal types of guarantees cannot meet the needs of the parties, it is a product generated by practice. Before the promulgation of the Civil Code, scholars believed that "transfer guarantee" was invalid because it violated the "principle of numerus clausus of real rights" and the "principle of prohibition of liquidation". However, Article 388 of the Civil Code provides a "new life" for (equity) transfer guarantee. Whether adopting the "ownership structure theory" or the "guarantee right structure theory", the exercise of the rights of the transferee in equity transfer guarantee should be restricted by the parties' agreement and the purpose of guarantee. When the debtor is unable to pay off the debt, the creditor can realize the guarantee by adopting the “attribution liquidation type†method.

Date: 2024
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