What is a bill of exchange? Know how to fill it correctly and what is this commercial document for

The bill of exchange It is one of the safest and most common payment options in the financial sector, as it is used in millions of loans between people and entities. This tool is presented as a viable alternative to cash, to bank transactionsto the promissory notes and other forms of payment.

However, there are still many people who do not know what a bill of exchange is, what are its main characteristics and in what situations it is convenient to use it. To clarify these concerns, in the following article we provide all the necessary information about this commercial document.

What is a bill of exchange?

The bill of exchange is a formal document that meets certain legal requirements, through which a person or entity, known as drawerassume an unconditional commitment to another person, called turnedfor the latter to pay a specific amount of money to a beneficiary on an agreed date. Generally, the beneficiary is the spinner himself. In other words, the bill of exchange is a commercial instrument that instructs the payment of a specific sum of money on an established date.

How to correctly fill a bill of exchange?

To fill out a bill of exchange, the following sections must be included:

• Name of the rotator.
• SIGNATURE OF THE TURN.
• Name of the revolved.
• Letter number.
• Date on which the bill of exchange is made.
• Place where you must pay.
• Debt value in letters.
• Debt value in numbers.
• Date on which the letter must be paid.

What is a bill of exchange for?

The bill of exchange guarantees the Compliance with a payment obligation. When considered a value title, It has an executive character, which allows its collection to be carried out through an agile and efficient judicial process.

This speed is one of the most prominent characteristics of this mechanism, since it facilitates the recovery of debts quickly. Also, the bill of exchange It can function as a means of payment, which makes it a versatile tool in commercial transactions.

What figures intervene in a bill of exchange?

In a bill of exchange it is necessary that at least three parts involved appear. However, this amount can change according to the development of the transaction, since, in certain cases, the figure of the guarantee or the endorsee can be included.

• The rotator: It is that person who issues an order to turn to pay the beneficiary.
• THE TURN: It is the one who receives the order of the spinner to pay the beneficiary.
• The beneficiary: It is the person who will receive the payment on the established date.
• Endorser: It is the person who has the letter in his possession but for liquidity needs decides to transmit it to a third party including in this transfer all his rights and obligations
• Endosatary: It is the one who receives the lyrics. It would be the new policyholder or beneficiary of it. It can be a natural or legal person (it is common for it to be a financial entity).
• Avalist: It is that person who guarantees, in all or part, the payment.

What requirements should a bill of exchange have?

According to him Article 119 of the Securities Lawa bill of exchange must include at least the following elements:

• The “bill of exchange”.
• The specification of the place and the turn date.
• The unconditional order of paying a specific sum of money or an amount that can be determined, in accordance with the methods of updating or readjustment of capital that are legally allowed.
• The name and number of the official identity document of the person to which the payment order is addressed.
• The name of the person to whom the payment must be made, or the order of this.
• The name, the number of the official identity document and the signature of the person issuing the bill of exchange.
• The expiration date.
• The indication of the place of payment and, in cases stipulated by article 530 of the Securities Law, the way in which said payment must be carried out.

When is a bill of exchange?

The bill of exchange has various purposes, among which are:

• Ensure compliance with the credits granted: This document can serve as support for financing. In case of non -compliance with payment, the rotator has the option of presenting the document before the judicial authorities.
• Payment instrument: It can also be used as a payment method, thus facilitating commercial transactions.