Commercial Law: Negotiable Instruments and Merchant Rules

Persons Disqualified from Engaging in Commerce

• Ecclesiastical corporations
• Judges and representatives of the prosecution and public defense
• Public officials and persons disqualified by special laws

Merchant Enrollment and Requirements

Those seeking the enrollment of a trader must apply at the Public Registry of Commerce (PRC) in the courthouse. The application must include a formal letter, the signature of the owner, and the representation of a lawyer.

Five Principal Acts of Commerce

• Banking operations, insurance, exchange, and finance companies, etc.
• Negotiations on bills of exchange, checks, or any other transferable credit or bearer documents.
• Activities involving the distribution of goods and services.
• Commissions, commercial terms, and deposits.
• Persons or entities transporting things or people habitually.

Mandatory Accounting for Merchants

Every merchant whose capital exceeds the amount corresponding to one thousand minimum wages is obliged to keep formal accounting books.

Definition and Elements of a Check

A check is a payment order, pure and simple, which is issued at sight or for deferred payment on a bank where the drawer must have sufficient funds deposited in a current account, or be expressly authorized to turn a discovery (overdraft).

Key Elements Involved in a Check

• Drawer: The person who issues the check and opens the order on the account.
• The Bank (Drawee): The entity that must pay the check.
• The Beneficiary or Policyholder: The person to whom the check is drawn.

Promissory Notes (Pagaré)

A promissory note is a written promise by which a person is obliged to pay another (or to their order) a specific sum of money on a determined date.

Rules for Issuing Checks

• Bearer: When it is issued without specifying a payee name; in this case, the bank pays the person who presents the check at the window.
• To a determined person with the clause "to order": The check is made out to a specific person, meaning the recipient is clearly specified.
• "Not to order": This is issued for a determined person but does not permit third-party transfer; only the drawer or the specified payee can cash it. The clause must not contain "to order."

Check Payment and Presentation

• Sight Check: This is payable upon presentation to the bank and must be presented for payment within 30 days after its issuance.
• Deferred Payment Check: This is payable upon presentation to the bank from the payment date stipulated on it; it must be presented within 30 days after the stipulated payment date.

Bill of Exchange: Definition and Purpose

A bill of exchange is a written order covered by the formalities of the law, by which one person instructs another to pay a sum of money.

Object: Its fundamental purpose is to avoid the physical movement of cash and to allow the payment or charging of a debit or credit.

Legal Requirements for a Bill of Exchange

• The denomination of "bill of exchange" in the language in which it is drafted.
• The unconditional order to pay a determined sum of money.
• The name of the drawee who must pay.
• An indication of the maturity period to effect payment.
• Designation of the place of payment.
• The name of the person to whom (or to whose order) payment must be made.
• An indication of the date and place where the bill was issued.
• The signature of the person who issued the letter.