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CREDIT INSTRUMENTS AND TRANSACTIONS (Promissory Notes document by which…
CREDIT INSTRUMENTS AND TRANSACTIONS
Check
Is a document that a issuer extends to bearer
TYPES
Order Check
It is the one that is issued to the issuer, which is the owner of the account from which the funds are withdrawn
Bearer Check
It can be charged by the person who takes it to the bank, that is, the beneficiary of the check can be anyone.
Croseed Check
It can only be charged through a bank for it to pay into account
Check to credit it to the account of the beneficiary
If the beneficiary wishes to transfer the amount to a bank account without receiving the cash, the beneficiary can do so.
Certified Check
Is the one that issues an institution, certifying that there is sufficient funds to pay it.
Traveler's Check
Checks in euros or in another foreign currency that can be issued by a bank, usually is used by people who wants to travel to another country.
Minimum requirements for issuing them
• The mention of being a check, inserted in the text of the document.
• The place and date on which it is issued.
• The unconditional order to pay a certain sum of money.
• The place of payment.
• Name of the beneficiary who can cash the check.
• Signature of the person or company issuing the check.
• Name of the bank that pays the amount of the check.
Other
For greater security, the amount to be paid is written twice: once in numbers and once in letters. In both cases the amount is surrounded by symbols or lines so that nobody can write additional figures or words.
Always have the necessary funds in your account to cover the amount of the check.
In this type of transaction, they participate:
•The drawer, physical or legal person who issues and signs the check.
•The drawee or bank entity to which the payment is ordered and which acts as an intermediary thereof.
•The beneficiary or holder, which is the person or company that receives the payment for that service or product.
Promissory Notes
document by which an individual agrees to pay another, or his order, a certain amount of money on a certain date.
Minimun Requires
does not have a minimum amount
Parts of a promissory note
-Date and place of issue of the promissory note
-Name of the entity and office released
-Full name of the beneficiary (can be a natural or legal person)
-Amount expressed in numbers and letters.
-Date and place of expiration
-Account number and IBAN code of the issuer account
-The word I will pay
-Truncability bar identifier: This bar allows you to computerize the promissory note.
-Issuer signature
TYPES
ACCORDING TO THE PAYMENT MOMENT
Paid nominative
: Do not contain the clause 'to order'. They are similar to the 'to order' promissory notes.
Fixed and determined day:
Exactly the expiration date to which the promissory note prescribes is determined.
Variable term of the issue date:
It is necessary to add a due date to calculate the due date.
ACCORDING TO THE INCLUSION OF THE CLAUSE "TO THE ORDER"
Promissory notes to the order:
The beneficiary can transmit the promissory note for endorsement to a third party and in this way, he / she will be able to collect the promissory note in advance.
Promissory notes not to the order:
The beneficiary can not transmit the promissory note to a third party, it can only be transferred with an ordinary assignment.
ACCORDING TO THE FORM OF PAYMENT
Notes to be paid into account:
You can only enter the account to collect them.
Cross payment:
The promissory note can only be made by the issuer by credit card and can only receive the amount if you are a client of the freed entity or by credit card.
ACCORDING TO THE ISSUER
Banking Pay
: Banking promissory notes are those issued by a bank and delivered to the beneficiary in a book.
Non-bank / business payment
: Promissory notes issued by a company and impose on the beneficiaries some necessary requirements to benefit from the promissory note.
A promissory note
is used for mortgages, student loans, car loans, business loans, and personal loans between family and friends. If you are lending a large amount of money to someone (or to a business), then you may want to create a promissory note from a promissory note template.
Simple promissory note
: might be for a lump sum repayment on a certain date.
Demand promissory note
: is one in which payment is due when the lender asks for the money back. Usually a reasonable amount of notice is required.
BILL OF EXCHANGE CAN BE USED
1.- In sight
2.- At certain time seen
3.- At a certain time date
4.- A fixed day
Personal Promissory Note
It is used to record a personal loan made between two parties.
It shows good faith on behalf of the borrower, and provides the lender with recourse should the borrower fail to pay
Commercial Promissory Note
It is often more strict.
If the borrower defaults on its loan, the commercial lender is entitled to immediate payment of the full balance, not just the past due amount
Commercial lender can take a lien of the borrower property until payment in full is recieved
Investment Promissory Note
It is often used in a business transaction.
Investment Promissory Note are exchanged to raise capital fo the business, and they often contain clauses that deal with returns on investements for specific period of time.
Different types of promissory notes
