The Italian Registry for non-possessory pledge is now officially activated

In a press release dated 14 June 2023, the Italian Revenue Agency (Agenzia delle Entrate) announced that, from 15 June 2023, the electronic register of non-possessory pledges (Register) has been officially activated. It will now be possible to submit online applications to create non-possessory pledges (NP Pledges) on the Revenue Agency’s website.

 

The NP Pledge

The first regulation of the NP Pledge was introduced in the Italian legal system by Law Decree no. 59 of 3 May 2016. And it was subsequently converted into law (with modifications) by Law no. 119 of 30 June 2016 (D.L. 59/2016).

The NP Pledge is a significant innovation in the Italian legislation on guarantees, as it allows creditors to benefit from the guarantees over movable assets avoiding the need to “dispossess” the relevant debtors of the pledged assets. This means that the debtor and pledgor over an NP Pledge can keep possession of the charged assets and even use the assets within the limits of the non-possessory pledge agreement. Creating an NP Pledge over the charged assets is done through an electronic application and registration on the Registry.

 

Who can create an NP Pledge?

According to Article 1, paragraph 1 of D.L. 59/2016, all companies and entrepreneurs registered on the Italian Companies Register can create an NP Pledge to secure present, future, determinate or determinable debts in relation to the exercise of the business activity.

 

On what kind of asset an NP Pledge can be created?

According to Article 1, paragraph 2 of D.L. 59/2016, an NP Pledge can be created on movable assets (including intangible assets) related to the exercise of business activity, as well as on receivables arising from, or related to, such business activity, excluding movable assets registered in other type of registries (such as cars, boats, trains). The movable assets can be existing or future, determinate or determinable, also identifiable by referring to one or more product categories or to their total value.

Moreover, the debtor (or the third-party pledgor) creating the NP Pledge is authorized to transform or dispose (in compliance with their economic purpose), as well as to transfer the pledged assets. In such cases, the NP Pledge will be automatically transferred to, respectively, the products/goods resulting from the transformation, the amount received from the transfer of the pledged asset or to the substitute asset acquired with that amount.

The specific categories of assets that would be eligible as charged asset under an NP Pledge have been identified in the resolution adopted by the Italian Revenue Agency on 12 October 2021 (Prot. no. 26734/2021).

 

How do you perfect an NP Pledge?

Ministerial Decree no. 114 of 25 May 2021 (D.M. 114/2021) establishes the regulation concerning the Register for NP Pledges. Article 3 of D.M. 114/2021 states that the party requesting the registration in the NP Pledge Register must electronically submit the constitutive agreement of the NP Pledge to the Registrar, along with a digitally signed application. If the registration is requested by a representative of a company, the digitally signed power of attorney must also be uploaded.

The registration application must include:

• personal details of: creditor, debtor, and of any third-party pledgor, including name, surname, place and date of birth of the individual entrepreneurs or, in case of legal entities, companies, and other business entities, the name or company name and registered office;
• tax code of all the parties involved;
• place and registration number in the business register of the debtor and of the pledgor;
• domicile of the creditor, debtor and pledgor;
• certified email addresses (PEC) of the debtor, pledgor and creditor;
• date of the agreement for the creation of the NP Pledge;
• the maximum guaranteed amount;
• description of the secured receivable (if existing) or description of the existing legal relationship from which future receivables may arise – if the NP Pledge is created over receivables;
• description of the pledged assets or pledged receivables, including elements allowing their identification, and in particular:

1. nature of the asset or receivables and indication of whether they are present or future receivables;
2. location of the assets (if specified in the relevant agreement);
3. brand and identification number (if specified in the relevant agreement);
4. quality and quantity (in case of a set of assets to be charged);
5. type of industrial or intellectual property right and relevant registration details (if indicated in the relevant agreement), or any other distinctive element;
6. nature, quantity, and identifying details of the pledged shares or participations – to the extent that the NP Pledge is created over financial assets;
7. product category to which the pledged assets belong;
8. total value of the pledged assets (as indicated in the agreement for the creation of the NP Pledge);
9. specific description of the pledged receivables (if the receivables are existing) or description of the existing legal relationship from which future receivables may arise;

• economic purpose of the pledged asset, as declared by the pledgor in the deed of pledge;
• the possibility, if provided, for the creditor to lease the pledged asset at the occurrence of an enforcement event;
• the possibility, if provided, for the creditor to acquire the pledged assets at the occurrence of an enforcement event;
• the specific indication that the purchase of the pledged asset was financed by a credit secured by reservation of title or other NP Pledge (whether applicable);
• if provided by the relevant deed of pledge, the willingness of the parties not to allow the pledgor to transform the pledged asset (or to transfer or otherwise dispose of such asset);
• a statement, digitally signed by the debtor (and, if different, by the pledgor) and made in accordance with the applicable provisions of Italian laws, that the pledged assets or receivables, as well as the secured credit, are intended for (or related to) the exercise of business activity;
• a declaration, digitally signed by the pledgor, made in accordance with the applicable provisions of Italian laws, regarding the existence or absence of a previous guarantee on the pledged assets or receivables, created in accordance with provisions other than Article 1 of D.L. 59/2016;
• contractual conditions governing the rotative nature of the pledge, if applicable and agreed by the party in the relevant NP Pledge agreement.

It’s at the parties' discretion to include any other element in the registration application they consider useful or necessary to identify the asset (or the receivables). Registrations and other formalities can only be executed based on a public deed, an authenticated or judicially ascertained private deed, a digitally signed contract according to the provisions of Article 24 of Legislative Decree no. 82 of 7 March 2005, or a judicial order.

 

How do you renew an NP Pledge?

An NP Pledge is normally valid for no more than ten years.

Pursuant to Article 4 of D.M. 114/2021, for the purposes of the renewal of the NP Pledge, a request stating the intention to renew the original registration must be submitted to the registrar. If the ten-year term has expired, the creditor can proceed with a new registration: in this case, the pledge takes effect from the date of the new registration.

 

How do you cancel the NP Pledge?

Pursuant to Article 5 of D.M. 114/2021, the cancellation of the NP Pledge must be carried out by the registrar upon submission of the relevant application for the cancellation, together with a document containing the creditor's consent or the definitive court order for cancellation.

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Get in touch if you have any questions or needs and we can help you register an NP Pledge and fulfil all the formalities.