What are the Negotiable Instruments and Types? Business Environment & Business Law

What is a Negotiable Instrument and Types?

NEGOTIABLE INSTRUMENTS is a very interesting topic in Economic, Business, and Commercial Law, which is also part of our CS Online Coaching Class. The following is explained:

What is Negotiate Instrument?

A "negotiable instrument" means a promissory note, a bill of exchange or a check payable either to the ordering party or to the holder.

TYPES OF NEGOTIABLE INSTRUMENTS

Negotiable instruments recognized by statutes: the Negotiable Instruments Act mentions only three types of negotiable instruments (Section 13).

These are the following:

i. Promissory Notes

ii. Bills of Exchange, and

iii. Cheques

Negotiable instruments recognized by the use or customs of trade: certain other instruments have acquired the characteristic of negotiability through the use or customs of trade.

For example, Exchequer bills, banknotes, Share warrants, Circular notes, Bearer debits, Dividend warrants, Share certificates with blank transfer deeds, etc.

PROMISSORY NOTE (Promote)

Definition: Pursuant to Section 4 of the Negotiable Instruments Act, "a promissory note is an instrument in writing (not a banknote or a currency note) containing an unconditional undertaking, signed by the manufacturer, to pay a certain amount of money only to, or on the order of, a certain person or to the holder of the instrument."

Parties to a Promissory Note

There are primarily two parties involved in a promissory note. They are:

i. The Maker or Drawer: The person who makes the note and promise to pay the amount stated therein.

ii. The Payee – The person to whom the amount is payable i.e. to whom the payment is to be made is called a payee.

In course of transfer of a promissory note by payee and others, the parties involved may be –

iii. The Endorser – the person who endorses the note in favor of another person.

iv. The Endorsee – the person in whose favor the note is negotiated by endorsement.

Characteristics of Promissory Note

1. It must be in writing

2. It must contain a promise or undertaking to pay

3. The promise to pay must be unconditional

4. It must be signed by the make

5. The maker must be a certain person

6. The payee must be certain

7. The undertaking must be to pay a certain and definite sum of money only

Read More About Negotiable Instruments and Types Read on Takshila Blog Page.

Visit our CS Executive Blog section for more CS Executive Study Materials.

Now prepare smartly for CS EXECUTIVE TEST with our CS Executive Online Classes Via.. cs executive online lectures Learn direct from your home/office. We here at Takshila Learning provide you the CS Executive Video Lectures, CS Executive Pen drive Classes along with CS Executive STUDY MATERIAL and ICSI Executive Study Material to help you prepare for your CS Executive Exam with the utmost ease.

Visit Takshila Learning for More Information About CS Executive Course

Call at 8800999280 / 8800999283 / 8800999284

Allotment of DIN (Director Identification Number)

Allotment of DIN (Director Identification Number) CS professional course : Section 153 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Qualification of Directors) Rules, 2014 Every individual intending to be appointed as a director as a director of a company shall make an application for allotment of Director Identification Number (DIN) to the Central Government in such form and manner and along with such fees as may be prescribed. Rule 9 of Companies (Appointment and Qualification of Directors) Rules, 2014 (1) Every Individual, who is to be appointed as a director of a company shall make an application electronically in Form DIR 3, to the Central Government for the allotment of a DIN along with such fees as provided in the Companies (Registration Offices and Fees) Rules, 2014. (2) The Central Government shall provide an electronic system to facilitate submission of an application for the allotment of DIN through the portal on the MCA21...

PURCHASED GOODWILL METHOD UNDER IND AS 103

The acquisition of subsidiaries results in Goodwill calculation and also records net assets of the subsidiary at fair value on the date of acquisition. Let’s get answers to all the questions related to Goodwill, valuation of NCI, and impairment relating to them. Q1 – What are the ways in which an entity can make payment for purchase consideration? ANS: – Cash – Share exchange – Deferred payment – Contingent consideration Q2 – How is deferred payment dealt, when it forms part of purchase consideration? ANS: The deferred payment is discounted to present value and included in the cost of consideration. At the end of each year, the liability is increased by unwinding the discount, until the payment is settled. For example, An amount of Rs. 108,000 was deferred to be paid after 2 years. The discount rate applicable is 8%. The net present value today of Rs. 108,000 is equal to (108,000 * 1) / (1.08) ^2)= Rs. 92,593 included in purchase consideration. A liability of Rs. 92,59...

Contract of Guarantee important topic for CS Professionals

Contract of Guarantee important topic for CS Professionals For CS Course , Takshila Learning is offering CS Professional online classes for students in an easy, convenient, and simple way through our portal www.takshilalearning.com . It helps students to grab the conceptual knowledge in a different but simple way. CS online classes for CS preparation are a collection of HD-quality recorded lectures with the detailed explanation of the content by experienced and well-known faculties. An interesting topic from Drafting – ‘ Guarantees ’ is discussed below: Guarantees Contract of Guarantee A “ contract of Guarantee ” is a contract to perform the promise, or discharge the liability, of a third person in case of his default. A Guarantee may be either oral or written. Parties involved in the Contract Surety: The person who gives the guarantee is called the “surety”. Principal debtor: The person in respect of whose default the gua...

Takshila Learning - Online Tutorials

Search This Blog