The two main persons who work with bills of exchange are the drawer and the drawer. The legislation strictly defines what rights they have, what they can count on, and what opportunities for doing business are determined within the framework of what is permitted by law. Currently, for many, bills seem like a scam, but in fact this area is clearly regulated by laws. To decide whether to invest your money in this way, you should understand the basic terminology, as well as the essence of the bills.
Basic concept
A drawer and a drawer are two parties entering into a working relationship on the basis of a bill of exchange. The first term is used to denote such an individual, legal entity, who personally draws up a bill of exchange, signs it and transfers it to the recipient. Equally, it can be a simple document or a translation. If a promissory note is issued, the issuer and the payer are usually one person.
What is this about?
To understand the essence of the bill and the drawer, you should also find the definition of this document. Currently, the law requires a security to be understood by this term. This is exactly what was declared by the current Civil Code in an article published under the number 815. The main feature of the paper is a certificate of obligation of the person who issued it or the payer, which is directly stated in the documentation, after a certain period of time to pay predetermined financial amounts. Program validity periods are indicated on the bill. It also spells out how much you need to pay.
The drawer bank, as well as the individual issuing such a document, is obligated to pay financial amounts to the holder of the relevant paper. Thanks to this logic of work, the security itself turns into a calculation method by which you can pay for products from the seller. In some cases, bills of exchange are used as credit security or sources of profit. For example, if you purchase a bill from a financial institution, then you can constantly get interest on it.
Base system
The laws clearly stipulate the rights of the drawer, the possibilities of who is the holder of the paper, the recipient of its benefits. All obligations must be fulfilled clearly on time. Otherwise, the injured party has the right to turn to a law enforcement agency for help. Currently, these two types of bills (simple, transferable) combine two or three parties at once in the framework of financial cooperation.
The drawer of the promissory note cooperates only with the recipient. This person who issued the paper is obliged to send a payment in the future in accordance with the agreement. The recipient in this situation is actually a creditor. When issuing a bill of exchange, the payer also enters the case, which in specialized terminology is known as the drawee. This is the person who is required to pay the amount instead of the drawer. The recipient remains the same addressee.
Design Features
When concluding a financial arrangement in accordance with the logic of a promissory note on paper, it is not necessary to indicate to whom exactly it will be necessary to send money upon completion of the interaction program. A security gives the right to receive amounts on it to someone who presents it at the right time for settlement.
The drawer of the bill of exchange directly interacts with the drawer, who will write out the specific document. The payer is often the person who wants to purchase the goods.The name of the remitter is mentioned and the order is written to the drawee about paying the due amounts to the remitter according to the documentation. If the obligation is transferred, on its reverse side this fact is necessarily fixed by stating the endorsement. Formally agreeing with the obligations under such a program, participants put forward an acceptance. Trassat, confirming familiarization with the program and its coordination, on the front side of the documentation makes an appropriate inscription. The accounting program involves the transfer of money to the address of the lender.
Curious moments
Banking makers, entering into such a program of interaction, take into account that the obligations are unconditional. Therefore, it is impossible to introduce into the interaction program conditions under which the holder would not receive the amounts due to him. In addition, a bill is drawn up in a strictly established form with all relevant details mentioned. If any field is filled out incorrectly, the documentation is recognized as void, no one should fulfill its obligations.
Accounting with the drawer is made taking into account the fact of independence of the security. This approach implies a lack of binding to the agreements, papers, designed to declare the case. Even if the bill was transferred as part of such cooperation, the financial document is segregated from it. Immediately from the moment of signing, it is separate, full-fledged, obliging the parties to the interaction to fully comply with their obligations.
Is everything in place?
Before accounting entries, the drawer, the recipient of funds for obligations are required to carefully check whether all the details are indicated correctly and in the proper places. It is supposed to indicate the name of the documentation, labels of its belonging to simple or transferable. In the first case, the issuing document will pay, in the second version there is a certain payer who will bear financial obligations.
The document must clearly indicate the obligation to pay a specific financial amount. In simple, the debtor confirms the obligation to repay the amounts, when making the transfer, imposes claims on the payment of money to a third party. At the same time, the amounts according to the document are indicated both in numbers and in capital form. Sometimes the drawer is a person who calculates the interest on the program and includes them in the final monetary value prescribed on the document. However, the condition is optional - in the presence of interest they can be specified separately.
What else to specify?
For the documentation to be valid, it is necessary to prescribe the deadlines for the fulfillment of the documentation obligation. In a number of cases, it is indicated that it is necessary to pay at the time of presentation of the document or within a certain time period from the moment of presentation of the paper. Sometimes a drawer is a person who decides to draw up a document subject to payment of the due amount at a limited time from the moment of signing the agreement. You can also specify a specific day on which you will have to pay off obligations. Sometimes documentation is drawn up without specifying a specific number. In this situation, the owner of the document can expect to be paid at the time of presentation to the debtor on any day during the year from the date of issue.
In order for the documentation to be drawn up correctly, you must mention the place of payment. If there is no such information, the location of the payer is considered as location. In addition to his address, there should be the full name of the persons, as well as other parties involved in the transaction. If you issue a promissory note, you can not register data about the payer, as it is a drawer. If the translated type of the document is drawn up, there is a possibility that it will turn out to be two different persons, therefore, it is mandatory to register the address, full name of the person who has the obligation to pay the amounts.
Everything is official
A drawer is a person who is primarily responsible for the correctness of documentation. His area of responsibility is to follow the correctness of filling all the points and fields of the document, to indicate correctly the place of drawing up the agreement, the date of this event. From the bottom right, a hand-drawn bill must be signed in order for the documentation to become valid. In the case when a legal entity acts as a source of obligations, it is necessary to ensure the presence of two signatures - the chief accountant, the general director. Signatures are certified by stamping the company.
It is allowed to put an aval from the outside. This term is used to denote such a guarantee, on the basis of which, with the correct accounting of bills from the drawer, third parties receive a guarantee of receiving the promised money. Aval is needed when the issuing bill is a person with dubious solvency. On the opposite side of the document it is allowed to put an endorsement, that is, such a signature that certifies the transfer of the right of claim on the security to another individual, legal entity.
What happens?
A bill of exchange is a rather old invention of man, and now the public has several types of this type of securities. Among themselves, they differ both in terms of the formation of debt obligations and in functionality. A certain set of features allows us to talk about belonging to any category.
When considering the issuer, mention should be made of treasury bills issued by municipalities, banks and private individuals. Sources of the first are the Ministry of Finance and the Central Bank. Municipalities are local governments, private owners are enterprises interested in raising funds for such a program. Bank bills are products manufactured by financial institutions in order to attract free funds of a wide range of legal entities and individuals. Of course, participants in such a program receive a reward for providing their capabilities to the bank.
Features
There are commercial, financial, fictitious bills. The latter do not imply real operations on the movement of products, money supply. Commercial based on commodity transaction. The purpose of concluding this kind of documentation is to defer repayment of financial obligations, that is, in fact, a bill of exchange is an option for a commercial loan. Finally, financial securities involve the transfer of borrowed funds to a needy person, while the document being drawn up becomes a guarantee of returning this amount.
Promissory notes differ from each other in the particularities of the participation of individuals. In some cases, the drawer is also the payer, then they talk about solo documentation. In addition to the creditor and the debtor, no one else takes part in such an interaction. Draft - this is a situation when the participant in the transaction making the bill and the payer are different and there are three parties.
Opportunities and obligations
The safest is considered to be secured bills when the drawer provides a pledge. Such will be at the disposal of the lender until the debt obligations are fully covered. In the absence of collateral, they speak of an unsecured version of the document.
Endorsed bills - securities in free float. These can be transferred to an interested person as part of a special transaction, purchased in a specialized market. Non-endorsed are promissory notes issued in a specific name. Passing them to no one will work.
Also, bills are divided into domiciled and not being such. The former suggest that payment is made at a location other than the location of the payer. This feature is always indicated on the security. Non-domiciled persons assume that payment is made where the drawer, the issuer of the bill, the remitter is located.It is also common to make payments at the address at which the document was issued.
Interaction Features
If the drawer writes out a promissory note, the process is a sequence of fairly obvious steps. First, the seller receives a bill, after which he sends the products to the buyer or provides a service, after which he presents a security paper in advance for a financial transaction. The drawer is obliged to pay for the received product, service, that is, to pay off the bill.
If you choose the option of a bill of exchange, the process of interaction between participants in the transaction is somewhat complicated. The tracer first supplies the debtor with the products, at the same time issuing a bill where the payer is indicated. Trassat accepts the transaction, transfers the security to the issuer of the bill, which forwards the confirmed documentation to the remitter, that is, to the one who needs to receive the specific amount. The remitter’s task is to redirect the bill of exchange in a timely manner to receive a financial amount on it. Trassat draws up a bank order for the payment of amounts, while extinguishing a security, which is a special mark. The document is forwarded from the creditor to the creditor, he sends the paper to the banking structure, after which the amount is credited to the account and the money is used as a way to repay the loan program.
Economic substance
The key difference between bills is the nature of the person who draws up the bill. If we are talking about a simple security, then the debtor acts as the drawer, but in the case of a transferee, the creditor often acts as such a person. Based on this feature, we can talk about the differences between bills, as the former are personal obligations undertaken by legal entities and individuals upon themselves in the framework of payment of the transaction. The second option involves an order under which the money will be paid by a third party.