A bill of exchange is a security that is issued and circulated in accordance with bill of exchange law. She confirms debt obligation debtor to the borrower, expressed in the form of money. It can be transferred to someone by order of the holder without the consent of the person who wrote it.
The bill is a historical database of securities of all kinds and comes from debt receipt. It is still actively used, although it is inferior to stocks and bonds.
Two forms
Bills are simple and transferable.
Simple is the unconditional obligation of the debtor to pay debts to the borrower in cash for the amount and conditions that are indicated in it. It is written out personally by the payer and, in fact, represents his debt receipt.
Bill of exchange It is an unconditional written order of the person issuing it to pay the debtor the indicated amount to the holder. Its other name is tratta, which translates from Italian as “transmission”. At the same time, the person who gives it is called a drawee, the recipient is a remitter, and the person obligated to pay it is called a drawee.
Promissory note (sample in the photo) gives the buyer when making a product transaction, when he does not have the required amount. The debtor is required to pay after some time. After the specified period, the holder presents the buyer with a document for payment. After payment of the debt, the paper is transferred to the buyer. As a rule, it is issued by the debtor to be transferred to the creditor.
A bill of exchange (sample in the photo) is named so because there is a “transfer” of debt to a third party. The student is the debtor of one and the creditor of the other. Tratta orders the drawee to pay the remitter.
Requisites
The bill must contain the following details:
- title;
- unconditional obligation to pay;
- the amount of the bill in words and numbers without corrections;
- time and place of compilation;
- name and address of the recipient;
- urgency;
- payment address;
- handwritten signature of the person who made the document.
Details of a bill of exchange:
- title;
- unconditional demand to pay;
- sum in words and numbers without corrections;
- time and place of compilation;
- name and address of the recipient;
- urgency;
- payer's name and address;
- place of payment;
- signature of the person who made the document.
Amount
It is written in words or words and numbers at the same time. In case of discrepancy, the advantage is given to the sum in words. Of the few, the least is given. You cannot break down a payment either by time or in parts.
An abstract promise to pay a certain amount does not depend on the circumstances of the provision of the bill. Its receipt before the asset arrives, transfers the risks to the person who gave it, because it is the debtor in the event of non-receipt of the goods.
It is possible to record interest on a loan immediately in the amount of the document or as a separate instruction. The interest is valid if the due date is specified, otherwise this condition is considered unwritten - it is not necessary to pay it.
Name and location
In the case of a legal entity, the full name and address are registered, the physical should indicate the surname, first name, middle name, place of residence, passport details.
Unconditional commitment and order to pay
A promissory note is written by the debtor, and the burden of payment falls on him.
A draft is issued to the payee for payment to the creditor. Therefore, it contains the requirement "Pay ... (name) or his order." It can be drawn up on the endorser: "Pay my order."
Terms of payment
Bill legislation establishes the following payment terms:
- "Upon presentation" - after providing the document, but no later than 1 year. The term may be stipulated "... upon presentation, but not earlier than September 1, 2016." When past due, the paper loses its strength.
- “On (the number of) days from presentation” - payment shall be made within the specified period after the moment of submission of the document, which is fixed by a mark on the front of the bill, which is consent to pay.
- “On (the number of) days from preparation” - payment shall be made after the specified number of days from the date of writing the paper.
- “On (date)” - payment must be made on the appointed day.
The absence of a payment deadline is equivalent to the fact that the bill must be paid within one year after presentation. If there is no date for the preparation of the document, then it is considered invalid.
The payment address usually corresponds to the location of the payer. If both are missing, or there are several of them, then the document is considered invalid.
Place and time of registration
Endorsement and compilation addresses may vary. In the absence of the latter, the paper is deemed to have been written out in the place indicated next to the name of the drawer. The absence of the first and second indicates the invalidity of the bill. Place of compilation should be specific. If it does not exist, then the document is also invalid.
The availability of time is a mandatory requisite, because it is needed to calculate the due date. An unrealistic date indicates invalidity.
Signature
It is put on its own after the name and address of the endorser in the lower right. Without it, paper is invalid. For legal entities need the signature of the 2 first persons and the seal. Falsified, fictitious or unlawful signatures invalidate the document.
Aval
Payment can be guaranteed by aval of any person for any obligation under the document.
It is made out with a special inscription on the front of the paper or its continuation - allonge. Aval must contain information for whom, where and when the guarantee was issued, 2 signatures of officials and the seal of the organization are affixed.
The avalist is responsible with the person for whom he vouched. Payment of a bill gives him all the rights that arise from it.
Aval increases the reliability of this paper and develops its circulation system.
The need for such a guarantee arises, for example, when the creditor does not trust the debtor, and therefore insists on additional guarantees of fulfillment of the obligation by the person whom he trusts more.
Partial aval is possible.
Acceptance
Acceptance is the consent of the drawer to pay the bill. Since this paper is not written by the debtor, but by the creditor, the payer must agree to make payment before the document is transferred to the recipient. Without this, the bill will not be accepted. The place of acceptance is indicated on the front of the draft to the left of the aval.
Partial acceptance is possible.
Trading bill system
The circulation of the bill consists in its transfer from one holder to another. Such freedom is due to the fact that he is entitled to receive a specific amount without any reservations, which can be transferred on market conditions.
The bill system permits the transfer of this security by means of a transfer inscription (endorsement) containing the relevant order of the holder. The transfer of a bill involves the transfer of the right to receive a specific amount. The holder on the back of the paper or allonge writes “pay the order” with the name of the recipient. The person in whose favor the transfer of the document takes place is called an endorser, and the person transmitting it by endorsement is called an endorser.
Partial transfer of the amount by signature is not possible. The endorser makes the endorsement in person. He is responsible for the payment and acceptance, but the “no turnaround on me” clause may withdraw it, excluding him from the circle of obligated persons.
Subsequent transmission can be excluded by indicating “not an order”.
Types of inscription
The following types of endorsements are accepted:
- A name containing the name of the endorser.
- Blank - without such a name. The holder can write the name of the new owner himself or transfer the document without further inscriptions. After recording the name, the blank endorsement becomes nominal. This usually happens upon maturity.
- Collection - in favor of the bank. It contains the inscription "for collection" and provides the right to present a document for payment or acceptance.
- A pledge inscription is made when a loan is pledged to a borrower. It is made out with the words “currency as a deposit”. Ownership is not granted by such an endorsement.
Accounting
By accounting is meant the purchase by a bank of a bill of exchange before the due date of payment. In this case, early receipt is paid by a percentage of the amount - at a discount. Discount rate set by the bank and depends on the creditworthiness of the holder.
Recalculation of a bill is an operation of its sale by a bank to a central bank.
Payment
The receipt of payment is established by law and consists of the following stages:
- Unless otherwise indicated, presentation for repayment shall be made at the address of the debtor.
- After the submission of the document, payment must be made immediately. Deferral is permissible only in exceptional cases provided for by law.
- When calculating the due date, the day the security is issued is not taken into account. If the repayment of the bill on a working day is not necessary, then it is transferred to the next working day.
- The debtor can pay only part of the debt, and the holder is obliged to accept the payment. In this case, an appropriate mark is put down. The outstanding amount may be appealed against by a lawsuit against any obliged person.
Calculations
Bill system of settlements between seller and buyer with deferred payment solves the following tasks:
- ensuring unconditional receipt of money on time, does not require an advance payment, increases trust, increases the turnover of goods and money;
- Settlements by promissory notes contribute to offsetting claims;
- development of a commercial loan, which allows you to make a transaction in the absence of funds, to establish a convenient payment term.
Types of bills:
- treasury - provide coverage of the budget deficit;
- friendly - provide a loan to a troubled enterprise, "on friendship" received a bill from a creditworthy;
- bronze - without security, the debtor for it - a non-existent person;
- commercial - types of bills based on purchase and sale transactions on credit;
- financial are based on a loan from one person to another, they also include promissory notes that draw up overdue payables.
Protest
The protest is a notarized fact of refusal to pay, which gives rise to the responsibility of the entire chain of persons involved in the circulation of the paper.
The current bill system for protest requires the submission of this document to the notary public office before 12 noon on the day following the expiration of the payment date. The security is accompanied by an inventory indicating the reasons for the protest and the bank on behalf of which it is committed.
On the same day, the notary office appeals to the debtor with a request for payment. In case of refusal, draws up an act, enters the document into the register and affixes “protested” with the date, signature and seal on the front side.
Bills in the Russian Federation
The market is predominantly represented by the obligations of banks and large energy companies.
Compared with them, a bill of Sberbank of Russia has several advantages:
- high liquidity;
- acceptance for payment and accounting throughout the Russian Federation;
- simplified repayment procedure: in addition to a security, only a power of attorney and a passport of the holder’s representative are required;
- Sberbank's bill of exchange is reliably protected from falsification;
- a single database of issued and paid documents.
Application in the Russian Federation:
- guarantee of delivery and payment of goods upon exchange of a buyer's bill of exchange for goods or documents of the seller;
- acceleration of mutual settlements due to endorsement, high liquidity, the absence of delays, for example, when the account is seized;
- a profitable means of settlement with suppliers when purchasing at a discount and payment at par.
