Financial Documents: Notes, Receipts, Transfers, and Payment Orders

Posted on Aug 3, 2024 in Law & Jurisprudence

The Promissory Note: Definition and Persons Involved

According to the Foreign Exchange Act, a promissory note is a written commitment by a natural or legal person (the signatory) to pay a certain amount to a beneficiary (or person to whose order the endorsement is made), at a specified place of payment and maturity date.

Persons Involved:

• Signatory: The person who issues or makes a promissory note and agrees to pay.
• Beneficiary: The person designated by the signatory to receive payment.
• Holder: The person entitled to demand payment, usually the beneficiary or the last endorsee.
• Endorser: The payee or holder who transfers the note to another by endorsement.
• Endorsee: The person receiving payment through the endorsement, who may in turn continue to transmit it for endorsement or act as a guarantor.
• Guarantor: A person who guarantees that the signatory will pay the amount of the note on the maturity date; otherwise, they will be responsible.

Requirements for Full Validity:

To be fully valid, a promissory note must meet the following requirements:

• Name of note inserted into the document and expressed in the same language used for writing.
• Unconditional promise to pay a certain amount in euros or foreign currency convertible and admitted to official listing.
• Place where payment is due.
• Name of the person who has to make payment, or failing that, the individual or whose order has to make that payment. No bearer but may be left blank for the holder to fill.
• Date and place of signing the note.
• Indication of maturity.
• Signature of the person issuing the title.

The Maturity

The maturity may be issued:

• On a fixed date
• At a period from the date
• At sight
• At a period from the sight of the note

Acceptance is only required when the maturity is “a term from the view.” The signatory has to put a stamp “seen” and from that time period begins to run from the maturity date. Refusal to put “seen” in the promissory note allows the holder to resort to exchange action that can be direct (when they go against the undersigned or guarantors) or back (when they go against any other obligor).

Non-Payment of the Note

In case of non-payment of the note, action can be taken against the forced exchange (signer, guarantor), executive, or regular speedy trial. The amount to claim is the same as the draft.

Endorsement and Guarantee

The same rules apply as for the bill of exchange. If not indicated, the author will endorse. Endorsement clauses “not to order” / “last endorsement” cannot be re-endorsed.

The Note as a Document Exchange

There are three options:

• Endoscopic granted: You can request the advancement of the amount of the promissory note in exchange for commissions. The bank conducts a preliminary study of the signatory.

• Cession, assign cobro: The management of payment is subject to the IS / AJD (stamp duty) in the same amount that the letter should:

  • That extends to the order (endorsed)
  • Which are transferred to the discount
  • What is this recovery by a third party outside the term of issuance.

The amount is doubled if the maturity exceeds 6 months.

The Difference Between the Note and Bill of Exchange

Turns and Payment Orders

A draft is a payment order, nominative and unconditional, made by a person known as a client, who orders a credit delivery to a third person known as a beneficiary, an amount of cash. The amount of credit will be executed upon prior identification of the beneficiary (nominative term) presenting the identity card in the case of natural persons or articles of incorporation and empowerment in the case of legal persons.

To make the payment, the customer must sign a payment order and provide funds if available. This operation can also be done with a charge to the customer / client.

The credit institution receiving the money must give notice to the beneficiary.

Document “Drawing Card”:

• The key, name, and address of the branch of the client
• Date, name, and address of the recipient
• Amount

The person who will pick up the money must know the key. There is no extra charge if you pick up in another office / bank. Money can also be sent by money order via postal mail service. The time is the same as that of a letter, and if the rotation is CW, it is hours.

Payment Orders are cash deliveries made by the payer in the office of the beneficiary. The office is usually in the same square (“promissory note”) and if in another place (“payment order”).

The Receipt of Cash Payment Receipt

A receipt is a document issued by the person who collects an amount that goes to making the payment as proof of receipt by that amount. They are usually issued on official forms consisting of a matrix or receipt and a copy receipt. It comes signed by the person charged to pay.

It must include:

• Receipt number (must be sequential)
• Name and address of the sender and recipient, date of issue or issue
• Amount in letters
• Reason for extending the receipt
• Signature of the person issuing the receipt

Receipt of Payment Standard

Procedures were used for collection if payment is made through direct debit to a bank account. It is usually used when payments are frequent and repeated over time. The payer gives an order to their bank to attend on their behalf and charged to your account receipts extends shipper concept and value in the order specified.

Typical examples: utilities (water, electricity, gas), fees (colleges), etc.

Banks normally allowed to discount the bills paid.

Formal Requirements of the Standard Receipt:

• Expiration: You can also use formulas as “so many days to view” or “at sight.” If not specified, it means to be discounted to their presentation.
• Concept and reason (bill payment, fee, etc.)
• Debit: Provide the name of the entity, branch, and details of the holder of the office bank account.

You can make a bill-receipt: VAT No., date, amount to be paid, and if necessary, fees and other taxes.

In the case of supplies, when we give the bank details, it means that you consent and that you will pay for everything. In other cases, it must give a written order to the bank to accept a receipt / s. You have to put the name of which will charge you a receipt and tax identification number of the current account, due date, amount.

Assignment: If the number of bills is high, usually sell them to a bank for collection management or discount. If payment is not made, the holder returns to its assignor and also charge you return shipping.

Transfers and Bank Transfers

A transfer is a transaction through which account holders can perform a shift of funds between two accounts that are of the same person or different, in the same or different banks, in the same or different locations.

Transfer: When the mobilization of money is between accounts of the same owner and the same entity. Condition -> the customer who gives the order to account surplus.

The two figures that appear in both transfer and for transfer are:

• Originator: Natural or legal person account holder who gives the order to your bank to transfer money that you will be billed. (For example: from €1000 goes to €950).
• Beneficiary: Natural or legal person beneficiary of that amount of money will be paid on account (For example: from €1000 to €1050 goes).

Start with a financial institution by order in writing (fax, etc.) or by completing the document or specific form, must appear:

• Date of Application
• Identification (name or business tax ID number, address)
• Beneficiary identification (name or business tax ID number, address)
• Current Account Codes
• Concept and observations
• Import

Banks often charge fees for making transfers. Two ways:

– The percentage of the amount – fixed fee. Ahem: from 0-1000 € – > 1 € commission / of 1000-2500 € -> 2.50 € commission … Two types of transfers and transfers: ◊ Internal transfers: those involving only one bank. Transfer ▪ pure: originator and beneficiary are the person who has multiple accounts on the same entity. Grounds -> distinguish payments, loans .. There are entities that are responsible or can cover negative balances between accounts of the same person. ▪ own internal transfers: the account of the originator and beneficiary are the same entity but in different offices. ◊ External transactions mobility of money between banks. ▪ Download: when it occurs between the bank of the payer and the recipient, and each other. There are compensatory mechanisms that do not necessary intervention of a 3 rd bank. ▪ Transfer hint: when the bank of the payer and payee are not clearing and need the intervention of a 3rd entity. It also can be ordered to make transfers or transfers in an automated / systematic repetitive. The channels are used to make transfers or transfers are bank branches, ATMs, online banking, etc. BENEFITS: time of payment / collection, comfort, speed, security .. It is very important to appear 20 digit corriente.Entidad bank account (4) / Branch (4) / DC (2) / Account Number (10). IBAN (International Bank Account Number): is a series of alphanumeric characters that identify a particular account at a financial institution anywhere in the world, each account has a number of IBAN. This number is established the European Committee for Banking Standards. It has 24 characters, of which 20 are the digits of the current account and the remaining 4 the IBAN (the 2 first identify the country and the 2 following its own check digit for the bank).SWIFT / BIC (mandatory): is the bank identification code for foreign transfers. Consist of 11 characters:> The first 4: are the identity of the bank. (For example: Banco Popular -> POPU)> The 2 following: the identification of the country. (For example: Spain -> ES, France -> FR …)> The 2 following: the location. (For example: Madrid -> MM)> The last 3 (optional): are the identification of the office. (Ex: 001) The company that manages the numbers: SWIFT (Society for Wordwide Interbank Financial Telecomunication).