New Securities For Business Act
Royal Advocates International Ltd.
The cabinet recently passed a resolution to approve the following proposed drafts submitted by the Ministry of Finance, namely the Securities for Business Act and the Amendment to the Civil and Commercial Code; in order that assets having economic value can be used as security to obtain credit facilities from the bank and/or financial institutions. At present, the securities used against debt payment are restricted to mortgage of immovable property (land and building) and certain movable property (ships or vessels of 6 tons over, floating houses, beasts of burden under the current Civil and Commercial Code) and in the form of a pledge, which is required for movable property to be delivered to the creditors. Other assets having much economic value in business operation, such as the business itself, inventory, machines, raw materials used for production, rights of claim and etc. cannot be used as securities to obtain the credit facilities. The business operators, hence, lose their opportunity to obtain the credit facilities from financial institutions for use as working capital in their businesses.