Pledge of Shares of Stock | USA

Purpose of Document

When securing a loan with shares of stock, the borrower is required to sign a pledge of the shares. This form establishes that the lender will hold the shares as collateral to guarantee repayment of a promissory note.

Lender's Rights and Restrictions

The lender is granted the authority to instruct the issuing company to transfer the ownership of the pledged shares into the lender’s name on the company’s records. However, the lender is not permitted to sell, encumber, or collect dividends on the shares while they are held as security.

Borrower's Rights

The borrower retains the right to vote the shares, provided that he or she is not in default under the terms of the promissory note.

Release of Shares

Once the loan is fully repaid, the shares will be transferred back to the borrower.

Availability of Form

The Pledge of Shares form will download immediately following purchase. This document can be used throughout the United States.