When we consider the driving force behind the economies of first world countries it is “limited liability companies” that sit at the forefront.
The responsibility for legal obligations falls upon them.
It is worth noting that the shareholders are not liable for company debts. Thus, in the event of the company filing for bankruptcy, the company’s creditors will be liable for the loss as a result of the unpaid debt.
When you have loaned money to a company or if you have allowed said company to make purchases from you on credit, then you will need to ensure the security of this acquired debt.
One of the most effective ways to ensure the security of debt is through use of real right over property which gives you a right with respects to a particular property.
An example is when a bank lends money on security of a mortgage over your property.
If you fail to meet the instalments then the bank can sell the property and then repay themselves from the money made from the sale. In short, the bank has rights over the property itself.
While real right gives you rights to a property, personal right only gives you the right to sue someone personally.
In the event that they have nothing, then the outcome will be that you recover nothing from suing them thus making it pointless.
Another way in which a person or company can ensure the security of debts is through use of a notarial bond over movables.
Thus, in the event of a company owing you money, the movable property such as the stock-in-trade or equipment of the company can be sold in order to repay you the amounts owed.
The only problem with this is that unless you have physical possession of the movable property, you will only have a personal right against the company.
Thus you will need to act quickly in order to acquire a court order which will allow for you to take possession of the movable property which is covered by the notarial bond.
After obtaining the possessions you will have a real right over the property.
Should the company go into liquidation, then you will be able to sell the property and secure the amounts owed to you.
Should another company, with a notarial bond over the same possessions, obtain a court order before you then they will take possession of the movables.
This highlights the importance of using haste when trying to obtain security for the debt owed to you.
We are ready to assist with the drafting of notarial bonds and acting on your behalf to secure your real rights. Contact us without delay.
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