Tag: capital market

Money market funds were a financial innovation partly inspired to circumvent regulation Q, which is no longer in existence. The money market is a market for short-term funds which deals in monetary assets whose period of maturity is up to one year. Generally money market is the source of finance for working capital. Transactions of money market include lending and borrowing of cash for a short period of time and also sale and purchase of securities having one year time.

A partner of a trading or non trading firm signs a Negotiable instrument liability incurs in the name of the firm. When a maker or holder of the negotiable instrument signs a document, it should be signed in the name of the firm. Signing negotiable instrument in the name of the partners is not valid.

Everything mentioned below is required to make the endorsement complete except it is signed and delivered with intention of vesting the endorsee with the duties of the holder. Endorsement can be defined as an act of a person who is holder of a negotiable instrument in signing his or her name on the back of the instrument, thereby transferring title or ownership.

According to Negotiable Instrument Act, 1881, a promise to pay the bearer is not the type of promissory note s promissory note can be defined as a written document which states the promise to pay the sum of money to a specified person.

For an endorsement to be called as Restrictive endorsement, it should satisfy the following condition- if the endorser restricts or excludes the right to further negotiate the instrument. The result of a restrictive endorsement is that a financial instrument is no longer a negotiable instrument that can be passed from the stated payee to a third party.

According to Negotiable Act, 1881, Bill of Exchange refer to an instrument in writing (not being a bank note or a currency note) containing unconditional undertaking, signed by the maker to pay or demand or at a fixed or determinable future time or the bearer of the instrument. A bill of exchange can be defined as a written order to a person requiring them to make a specified payment to the payee.

Promissory is invariably in writing, definite and unconditional. A promissory can be defined as an instrument in writing containing an unconditional undertaking, signed by the maker, to pay a certain sum of money to or to the order of a certain person, or to the bearer of the instruments.

Every business undertaking is engaged in the production and/ or distribution of goods or services in exchange of money. The essential characteristic of business undertaking involves the production or distribution of goods and services in order to satisfy human wants and needs in exchange of money or profit.

The money deposit made by the buyer to the seller of real estate during negotiation stage is known as Earnest Money Deposit. An earnest money deposit can be referred as a specific form of security deposit made in some major transaction. It is done by the applicant to show his willingness to complete the transaction.

A commercial bill is a short-term, negotiable, self-liquidating instrument which is used to finance the credit sales of firms. Commercial bills are known as trade bills or accommodation bills. These are common instruments used in credit purchase and sale. These have short term maturity period generally 90 days and can be discounted with bank even before the maturity period.