Commentary on Sections Part 2 – Security over Moveable Property Statutory pledge Section 46 – Competence of individual acting as provider of a statutory pledge
217.This section generally (with some exceptions) prevents individuals – as opposed to corporate bodies – from granting a statutory pledge. Under subsections (1) and (2)(a), the situations where an individual is entitled to grant a statutory pledge are as follows—
	the individual is acting in the course of their business and the asset is used (or to be used) wholly or mainly for the purposes of that business,
	the individual is acting in the course of the activities of a charity of which they are a charity trustee and the asset is an asset of the charity, or
	the individual is acting in the course of the activities of an unincorporated association of which they are a member and the asset is owned on behalf of, or jointly with the other members of, that unincorporated association.
218.In addition, subsection (2)(b) provides that any corporeal property to be pledged must have a monetary value exceeding £3,000 immediately before the granting of the document under which it is to become encumbered property (though there is a power for the Scottish Ministers to adjust this sum by regulations – see subsection (3)(a)). The effect is that it will not be possible for an individual acting in the course of a business to grant a statutory pledge over low-value but essential items which are used primarily but not exclusively for business purposes (for example, a washing machine which is used for a laundry business but also occasionally for home purposes).
219.The Scottish Ministers also have a specific regulation-making power to exclude particular types of property from being pledged by those categories of individuals who are allowed to grant a statutory pledge (see subsection (3)(b)). For example, this could be used to exclude the pledging of a motor vehicle (or, using the power in section 118 to provide for different purposes, to exclude the pledging of a motor vehicle unless it is being pledged to secure its purchase).