1. Characteristics of the Bill of Exchange
La bill of exchange It is a commercial document that includes a payment obligation at a specific maturity.
This payment system dates back to the XNUMXth century and has been one of the most popular means of payment in our country.
Do you know its main characteristics?
Next, we explain them in detail.
2. What is the bill of exchange?
The bill of exchange is a official business document, since it is stamped by the State and meets the requirements defined in the Exchange and Check Law 19/1985.
We can define the bill of exchange as a commercial document by which a natural or legal person agrees and is obliged to pay a certain amount of money to another in a defined period of time.
It is, therefore, a title-security that accredits and guarantees a debt between its protagonists.
Therefore, among its functions we highlight the following:
- Payment method. It replaces cash, just as the bank promissory note does.
- Guarantee payment. The beneficiary of the bill can act before the courts in case of non-payment.
3. What parts are in this payment order?
There are three agents or figures involved in bills of exchange:
1. Drawer or turner. He is the one who creates the payment order.
2. Drawn. He is obliged to comply with the payment mandate, which is issued at his expense.
3. Policyholder, beneficiary, bearer or holder. It usually coincides with the drawer, except when the bill is endorsed. In any case, it is the beneficiary of the payment at maturity.
These documents, to be legal, must be stamped and comply with the established regulatory requirements.
As it happens with the bank note, you have to look at several elements before signing the document.
Its essential content is:
– Identification as a bill of exchange in the language in which it is written.
– Mention of the payment order for a specific amount, with the amount indicated both in words and figures.
– Natural or legal person to whom payment will be made on maturity.
– The signature, address and name of the drawee.
– Expiration or date of the agreed payment.
– Place and date of issuance of the document.
– Signatures: of whoever creates it and whoever accepts it.
– I accept, date of acceptance and signature of the acceptor.
Like the bank promissory note, it is a means of payment and a valid, complete, monetary and literal credit voucher, since the amount reflected in the document is paid.
In addition, it includes the place and date of payment, has a joint and several character and admits the transmission to a third person by means of the endorsement.
4. How are bills of exchange and promissory notes different?
If you are familiar with the bank promissory note and the promissory note discount, you may be wondering what differences exist between the two documents.
The bank promissory note is a promise to pay that reflects the firm will to pay the money at maturity while the bill of exchange, it is a payment order Issued by the person ordering it, not by the person who must pay for it.
That is to say, the bank promissory note is issued by the debtor; while in the letter it is the creditor who issues the document to ensure payment.
Their formats are easily distinguishable and the bill of exchange has a legal stamp who does not have the bank promissory note.
Finally, the promissory note only includes two parties, regardless of the fact that a subsequent promissory note discount may put a third party at risk.
The letter always includes three agents: the drawer, the drawee and the taker, although the first and the third may coincide.
At this point, we hope we have clarified what they are the bill of exchange and what differences it presents compared to the bank promissory note.
Our financial services also include bill of exchange discount, so if you are thinking of discounting these types of titles, we will be happy to help you.
Call us and we will inform you without obligation!
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