In the world there are a large number of different financial instruments. One of the most popular is securities. They took shape not so long ago, just a few centuries ago. One of the oldest and time-tested is a bill. What is this? What are they for? For what purpose are they issued?
general information
According to Article 815 of the Civil Code of the Russian Federation, a bill of exchange is a security that certifies an obligation to pay after a certain time the amount indicated in it. It can be used as a means of calculation, collateral for a loan and as a source of income. Distinguish between a simple and a bill of exchange. In the first case, only two parties are involved. If a bill of exchange is used, it means that there is a third. Especially interesting is the moment with the receipt of income. In this case, it is stipulated that the bill is purchased at the bank and subsequently receives interest. And a little more about terminology. There is a drawer. This is the side that issues the security. There is a bill payee. This is the party that first provides the funds and then will receive them. And there is a payer. This is the party that pays the agreed amount instead of the drawer. This is if there are three participants. In the case where only two parties are involved, the concepts of the borrower and the lender are usually used to designate. That is the essence of the bill.
Design specifics
Different types of bills have their own characteristics when creating. So, on simple securities it is not indicated who is the recipient of the money. It provides for bearer cashing. With a bill of exchange is not so simple. It is written out by the drawee (for example, by the buyer of the goods) to the remitter (seller and recipient of funds). At the same time, he undertakes to pay the so-called bill amount. When registering a security, a transfer inscription is put on its back. It is called an endorsement. A written consent is also issued - acceptance. How to take into account a bill? Postings on it go as with a regular loan and the issuance of money to the creditor. Therefore, there should be no problems with accounting.
What is the peculiarity of these documents?
A bill of exchange is a very specific security. It is accompanied by such features:
- Unconditioned monetary obligation. That is, no conditions can lead to the cancellation of the payment of a certain amount to the bill holder.
- Independence. This means that the bill is not tied to a specific contract. It is the result of a certain transaction, but at the same time it is isolated from it. And it should be considered solely as a separate document.
- Strictly defined filling form. It is necessary that all details have certain data. If at least one is missed, the bill will be declared null and void.
About the third paragraph, let's talk in more detail.
Required details
These include:
- Name of the bill and label. As previously mentioned, it can be either simple or transferable.
- Obligation to pay the bill amount. Payback is planned in a simple way, while a transfer is required from a third party.
- The size of the bill amount. It must be entered in words and numbers. In this case, the amount may contain interest on the bill, or may be indicated separately.
- Payment term. There are a large number of interaction options. So, for example, a certain time of payment can be established after presentation, or after registration of a security, or on a specific day. If the deadline is not specified, then this means that the bill is payable upon presentation within one year after it was put up.
- Place of payment. By default, indicates the address of the borrower.
- Place and date of compilation.
- The address and name of the payee and who owes the money. When using a simple security, the second item is not indicated. Whereas in the case of a transfer, different persons may act as a payer, therefore all data must be indicated.
- Signature of the drawer. It should be in the lower right corner and made by hand. In cases where the drawer is a legal entity, it is necessary to sign the chief accountant, director and seal of the organization.
It must be remembered that if at least one item is missing, the bill is recognized null and void. And this is a direct way to monetary losses.
About species diversity
It was previously mentioned that there are only simple and transferable securities. But this is far from the entire species classification, but only part of it. The fact is that there are a large number of signs that can be taken for subsequent division and grouping. Previously, the most popular was cited. So what types of bills exist? Depending on the symptom, it is:
- Issuer: Treasury, banking, municipal and private.
- Economic essence: financial, commercial and fictitious.
- Security payer: simple and transferable.
- Payment term: not / definitely urgent.
- Availability of collateral: not / secured.
- Ability to transfer to another person: does not / exists.
- Place of payment: does not / matches the address of the payer.
About the legislative aspect
And what about legal support? It is not strange (at first glance) that the compilation of these securities and their circulation are regulated not by civil law, but by bill of exchange. Now the law of March 11, 1997 No. 48- is in force. At the same time, he refers to the decree of the Central Executive Committee of the Council of People's Commissars No. 104/1341 "On a simple and bill of exchange" dated August 7, 1937. But this is far from the end of legislative roots. For the decision is based and practically verbatim repeats the adopted convention "On a uniform law on a bill of exchange and a promissory note." It should be noted that the law requires that securities be presented for payment on time. That is, either on the day agreed upon, or for the next two. If a bill of exchange fails, then a special procedure must be launched - a protest against it. It is carried out by a notary public. And further consideration for him in the courts is not required. Indeed, on its basis, a collection order is immediately issued.
About the foundation
A bill of exchange is a rather old instrument, which was based on the translation of commodity-money relations into the form of an unsupported promise to pay. At the same time, how the debt was formed is not important from a legal point of view, because it is considered a priori proven. What is interesting is that the rights are not transferred through cession (as in the case of other securities), but with the help of such a tool as an endorsement. That is, the endorsement. What about profitability? Issued promissory notes may provide for interest only in those cases when they are issued to bearer or when payment is agreed upon after the provision of the security. In other cases, interest is not allowed. But how then do you get income from them? And with the help of a discount.
A few words about banking institutions
A bill of exchange is not an equity security, therefore, when it is issued, it is not necessary to carry out state registration. Therefore, banking instruments use them as a financial instrument similar to deposits. But at the same time, the obligations taken do not participate in the deposit insurance system. But there are advantages of such tools: they also serve as a payment, and are investment tools, and act as collateral when applying for a loan. Yes, all of these requirements correspond to bank bills. Due to the simplicity and convenience of calculations, significant functionality and other pleasant moments, it is popular among organizations, commercial structures and individual entrepreneurs. Although, individuals also use them. It should be noted that if a security is presented for payment of a previously agreed term, then it is paid at a discount and the bill holder loses part of his funds.
About accounting
But what if there is no desire to lose invested money? Can I somehow compensate for lost income? Completely remove the negative effects will not work. But to minimize it is quite possible. Especially for this, a discount bill was invented. What is this tool like? If a person does not have time to wait for the payment date, he can take the security to the bank. And there, for her, he will receive the amount due, from which the discount rate of the bill, which is the commission on the part of the bank for his participation, will be taken. On the one hand, this is good, because it allows you to minimize losses. On the other hand, the amount of the bill will still not be paid in full. In addition, banks prefer high-quality paper. And if they are also guaranteed by another financial institution, the discount rate decreases very significantly. With medium and small enterprises with weak characteristics and solvency, they work carefully. This is expressed in a significant overstatement of discount rates.
Bureaucratic features
When the security in question is executed, it should have the following properties:
- Abstractness For the document, it does not matter how the debt formed or what was the subject of the transaction, the result of which was the bill.
- Indisputability. A security must be paid unconditionally. This is guaranteed by law.
- Turnover A security may be used as a means of payment.
- Possibility of use as collateral for a loan.
Why are they so common?
What is the reason for the popularity of this type of securities? For individuals, the advantages of such a tool is that cash is not needed. Bills are suitable for organizations and commercial structures due to the fact that it is possible to perform non-cash transactions with processing payment orders, transfer funds to accounts and the like. In addition, this security is very convenient when receiving funds. It is enough for the holder of the bill to put his signature (and seal if necessary) and transmit the document. So the bill entirely deserves the value with which it belongs. Although it is not so easy to get it, if you have desires, like bonds.
Place among other financial instruments
How much is everything - a loan, a bond, a bill. Why is there such a wide variety of financial instruments? The point here is that they are all suitable for certain purposes and are necessary in specific conditions. For example, a loan may be issued against a certain property. Whereas a bond is the estimated value of part of the assets. But all of them require the passage of certain bureaucratic procedures, stretched over time, and requiring a certain amount of time. But there are two enterprises that have been operating for a long time. Between them established trust. And so it turned out that one of them had all the money put into circulation and there was no money to make the calculations. In this case, you can turn to the services of a bill.
But why?
This will avoid bureaucratic difficulties and at the same time support the partner in his work, counting on long-term and successful cooperation in the future. Everything rests on trust. If it is, then the bill will do. With other financial instruments it is difficult to accomplish something like this. Although something like that is. For example, in the past few decades, credit cards have spread, in which banks offer a certain amount to their customers on loan terms. At the same time, the concept of a grace period is introduced - a time period within which interest is not charged. And if a person can pay off debt, then there will be no claims and overpayments.
Conclusion
A bill of exchange is a security that began to be used in a similar form in the eleventh century. During this time, she underwent a fairly significant number of changes and improvements, but the essence remained the same. After all, initially the bill was used in international trade in order not to carry a large amount of money over a considerable distance, but to write a document and upon arrival in the target country to receive the agreed amount in local currency.