Commercial papers and profit 2023. The importance of commercial papers is very great in economic and commercial life. A check or a bill of exchange performs three main functions, which we will learn about in our article today.
Commercial papers and profits 2023
They are papers that are circulated between individuals, such as the circulation of money, and their value is not in itself, but in what is written in the currency, and it is distinguished by its ease of transfer and creation. Commercial paper differs from banknotes.
Where the law requires that banknotes have special conditions in terms of form, value, coverage, and issuer. While commercial papers are being established in any form.
Once there is basic data limited to determining its value, time, and source of payment, the card comes into play. Thus anyone can issue commercial papers as long as they take these data into account. Restricting exchanges and substituting commodities that are mostly bought and sold on the exchange.
And commercial papers arose when trade developed and money transfer became a difficult method that impeded the ease of commercial operations to achieve commercial papers and profit.
Why was commercial paper invented?
- Because of the business environment and the different transactions of the merchants, it led them to invent commercial papers to meet their needs and facilitate trade.
- Then it was developed and called commercial papers different from securities such as silver, stocks and sukuk.
- Commercial papers and profit are of great importance and there is a need to differentiate between their types which confuses many businessmen.
- They may not have sufficient knowledge of the circumstances under which a check is best and under which circumstances a bill of exchange or surety is best.
- The role of bills of exchange in transactions between merchants, and trade, especially international trade, has made trade in bills of exchange a virtual necessity to enhance trust between merchants.
- Facilitating business and its continuity, activating transactions between them, and a means to fulfill debts and obligations. Thus, trade should be easy between individuals.
- They are surrounded by guarantees that make individuals feel safe in accepting them in their transactions as a means of fulfillment for profit.
- It has the same practical and legal value as cash. It is not hidden from the necessity of trading on credit, in the form of giving the debtor or the buyer a period of time after which he pays the required value.
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The date of issuance of commercial papers
Commercial papers appeared for the first time in some Italian cities, and they began to be used there in the twelfth century AD. This use was restricted to merchants but not to the general public, and was then developed in Great Britain. And now it is used for commercial papers and profit.
Money struck as coins, especially gold, exposed the wearer to problems because of their weight or the risk of being broken into and stolen. So the use of the B-shape bill was developed until it became universal in the seventeenth century and was not limited to merchants as it was when it first began to appear.
It became transferable by endorsement or alternation and endorsement is the signature on the back of the bill in favor of another beneficiary. It is now possible to pay for it, or to obtain value rather than creating it.
Commercial paper is easy to transport
A person is exposed to two main problems when traveling from one place to another or from one country to another. The first problem is that the type of money he is carrying may be different from the type of money where he is going. The second problem is that carrying cash may expose him to the risk of losing or stealing it on the way.
Therefore, commercial papers and profit solved these problems, as the person exchanged them for transferring money, thus avoiding the risks of loss and theft. Then he came to exchange money with him for the type of money circulating in the country he traveled to, so commercial papers were used as a tool to implement the exchange agreement.
In the draft law specifically, it plays this role. However, the bill has lost its current importance as a tool for executing the exchange contract due to the emergence of other modern means and tools that play this role.
They are checks, postal transfers, bank transfer orders and other modern means that have appeared. Because of the amazing scientific progress in technological means, commercial papers and profits have been achieved.
