Q.19. How does a bill of exchange is drafted?
While drafting a bill of exchange the
following are necessary.
1. STAMP
To prepare a bill of exchange in the
form of a legal document, the drawer of the bill has to pay a tax to the
Government which is accepted by issuing a stamp. The value of the stamp depends
upon the amount for which the bill has been drawn.
2. AMOUNT PAYABLE
The amount payable should be written
clearly. It is necessary that the amount should be written in words and
figures.
3. DATE
The date on which the bill is being
drawn or prepare should be posted accurately. The date is usually written on
the upper side of the bill.
4. NAME OF THE DRAWEE
It is necessary that the name of the
drawee should be mentioned in the bill. The words ‘’OR ORDER OR BEARER’’’
indicate the persons to whom the bill has to be paid.
5. FOR VALUE RECEIVED
A bill of exchange is always drawn
against a certain amount or value. Therefore the words ‘’For Value Received’’’
should always be written on the bill.
6. SIGNATURE OF THE DRAWEE
A bill lacking the signature of the
drawer is unacceptable and unlawful. Such type of a bill can be dishonored.
That is why the structure of the drawer are essential.
7. NAME & ADDRESS OF THE DRAWEE
The closing of the bill includes the
name and address of the drawee. It is written on the left side corner of the
bill.
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