Yes, for example to secure a loan. The agreement must be written with officially certified signatures, and the security right arises only on Commercial Register entry. If the memorandum prohibits transfers entirely, the share cannot be pledged. If transfer requires general meeting consent, consent is also required for the security. The shareholder continues to exercise shareholder rights while it exists.
Can a business share be used as security?
A business share has economic value and can therefore secure a loan or another claim. Section 117a of the Commercial Code permits this and otherwise refers to the general rules on security rights.
What form must the security agreement take?
The agreement must be written with officially certified signatures (Section 117a(2)). Unlike a business share transfer agreement, whose form was tightened from 17 August 2026 to a notarial deed or lawyer-authorised agreement, certified signatures remain sufficient for a security agreement. The security right itself arises only on Commercial Register entry. Before then, it has not been created. Either the secured creditor or security provider may apply for registration or removal.
When is general meeting consent needed?
A business share cannot be pledged if the memorandum prohibits its transfer entirely. If transfer is possible only with general meeting consent, consent is also required to create the security right; without it, the right does not arise. No further general meeting consent is required when the security is enforced and the share sold. Likewise, any other transfer condition in the memorandum must also be met when the security is created.
Who makes decisions while the security exists?
For shareholder and creditor alike, the key point is that the shareholder continues to exercise participation rights, including voting, rather than the secured creditor. We prepare the agreement, any general meeting consent and Commercial Register entry. Transfer and security rules should be clarified in the memorandum of association so that a later share transfer or enforcement does not encounter obstacles.
This answer provides general information on the law as at 17 August 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.
