This sample will let you know about:
- What is the importance of the legal environment in business?
- Discuss about the key elements of Legal Business Environment?
- Describe the Four Corner Model of Business Environment?
INTRODUCTION
The legal environment of the business can be explained as the process where attitude of the government is considered at the time of taking any of the business decision. It is necessary for any of the business organisation that whenever any of the law is passed by Parliament it must be followed. In any of the circumstances laws doesn't give the permission to perform any of those activity which are not legal in nature. In context of the file, three different criteria will be considered in which first one will be related with the preparation of loan agreement where every single information will be mentioned that why is it necessary and how it can be helpful. In second respective part, proper calculations will be made regarding the
1. Draft the Commercial Loan Agreement detailing the form of payment and including all data that is not provided and it is necessary.
Commercial loan agreement is one of the most important agreement which is to be prepared among the party who has been involved within the process of loan. It is necessary that once the loan agreement is drafted, all of the necessary terms and condition must be performed according and if in any of the situation problem occurs then in that respective situation innocent party gets the right to claim damages with the help of agreement paper. As per the given case study, it has been found that loan agreement is to be prepared by the involvement of Don Manuel GarcÃa Ferreand and Mr. Antonio López Hernández. As loan is being taken for commercial purpose, it will be necessary for them to work according to the requirement of commercial loan agreement terms and condition. Below, there is the detail description about the loan agreement between both the parties.
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Commercial Loan Agreement This particular loan agreement has been prepared on 15th September, 2016 Between Don Manuel GarcÃa Ferreand of Poblete, Spain (the lender) OF The First Part & Mr. Antonio López Hernández of Caracuel de Calatrava (the “Borrowerâ€) Of The Second Part By having the consideration, the lender is lending the “£ 40000†to the borrower. Here, borrower had agreed to do the repayment of loan amount where both the parties have agreed to fulfil their part of work. All of the promises will be performed in accordance with the loan agreement
LOAN AMOUNT & INTEREST
REPAYMENT
DEFAULT
SECURITY
GOVERNING LAW
COSTS
BINDING EFFECTS
AMENDMENTS
ENTIRE AGREEMENT
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Parties and Witness present in the agreement are required to sign of the agreement deed for the purpose of making it enforceable. |
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2. Determine the total amount to be paid at the expiration of each instalment with the detail of interest calculation, as well as the total amount that Mr. Antonio will end up paying for the loan received.
Total calculation for the loan amount for annual payment system
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Loan Amount: |
£40,000.00 |
|
Balloon Payment: |
£- |
|
Interest Rate (APR): |
4.00% |
|
Payment Rhythm: |
Annually |
|
Loan Term in Years: |
4 |
|
Payments in Advance / Arrears: |
Arrears |
|
Payment Amount (Annually): |
£11,019.60 |
Annual Amortization Schedule
|
Year |
Principal |
Interest |
Balance |
|
Total |
£40,000.00 |
£4,078.41 |
- |
|
1 |
£9,419.60 |
£1,600.00 |
£30,580.40 |
|
2 |
£9,796.39 |
£1,223.22 |
£20,784.01 |
|
3 |
£10,188.24 |
£831.36 |
£10,595.77 |
|
4 |
£10,595.77 |
£423.83 |
£- |
First 12 Month Amortization Schedule
|
Month |
Principal |
Interest |
Balance |
|
Total |
£9,419.60 |
£ 1,600.00 |
£ 30,580.40 |
|
1 |
£- |
£- |
£ 40,000.00 |
|
2 |
£- |
£- |
£ 40,000.00 |
|
3 |
£- |
£- |
£ 40,000.00 |
|
4 |
£- |
£- |
£ 40,000.00 |
|
5 |
£- |
£- |
£ 40,000.00 |
|
6 |
£- |
£- |
£ 40,000.00 |
|
7 |
£- |
£- |
£ 40,000.00 |
|
8 |
£- |
£- |
£ 40,000.00 |
|
9 |
£- |
£- |
£ 40,000.00 |
|
10 |
£- |
£- |
£ 40,000.00 |
|
11 |
£- |
£- |
£ 40,000.00 |
|
12 |
£9,419.60 |
£1,600.00 |
£30,580.40 |
Loan Summary:
|
Payment Amount (Annually): |
£ 11,019.60 |
|
Number of Loan Payments over Loan Term: |
4 |
|
Total Interest Paid over Loan Term: |
£ 4,078.41 |
|
Total Amount Paid over Loan Term: |
£ 44,078.41 |
Here, in this respective file the total loan amount which has been taken by Mr. Antonio was £ 40,000 where he has decided to pay back at the interest rate of 4% annually. This instalment will be continued for the upcoming four years. Talking about the total amount which is to be paid by Mr. Antonio is £ 44078.41. Secondly, the total additional amount of interest is £ 4,078.41 which will be paid in 4 equal instalment. Also, the annual amount which will be paid by Mr. Antonio is £ 11,019.60.Want to get Assignment Writing Service talk to our Experts.
3. Fill in the official models the four bills of exchange with all its clauses. By being present all parties are accepted at the time of signing the contract.
There are different parties which are included while preparing the bills of exchange where major role is always played by Banks. Whenever any of the loan agreement is prepared with the help of bills of exchange then in that respective situation, bank of drawer's and bank of drawee is mainly considered (Nogues-Marco, Herranz-Loncán and Aslanidis, 2019). It is done because bank are those party who involves within the work of managing the payment instrument. It is said that bills are the commercial transactions and mainly in this respective circumstances the amount are quite high which cannot be transferred in cash form. For the purpose of effective result, bank always show their participation in the form of Four Corner Model of bill of exchange where four different parties are involved: drawer, drawer's bank, drawee & drawee's bank.
(Source: The Four Corner Model for bills of exchange, 2018)
Dematerialisation of bills of exchange: It will be the stage where drawer of the bill have to convert the bill into the electronic form. It will be the duty of Don Manuel to convert the written form into electronic form.
Acceptance of Bill of exchange created electronically: Here, this will be the stage where duty will be of drawer's bank (Don Manuel's bank). If bill will be presented directly to them then they are the one who will have to accept the electronic bills of exchange without creating any of the issues (LAU, 2018). Here, bank will check all of the information about the bill and finally they have to decided whether they are accepting the bill or not. But, in case bill is not accepted then in that respective situation new bill is required to be formed
Settlement of Bill of exchange created electronically: It is that respective stage where drawers bank send the information to collect the required amount of fund from the drawee's bank. Where it is necessary for the dwaree's bank to inform about all of the information to its customer (Mr. Antonio) that what is the amount which is needed to be given to Don Manuel on due date.
Acceptance and settlement of a paper bill of exchange: This will be the final stage where it will be necessary for Drawee's bank to approve the final payment to Don Manuel. This will be the last process within the respective model (Douglas, 2018). Also, it will help to settle down the process of bill of exchange on specific time period.
CONCLUSION
From the above file, it can be concluded that whenever any of the person required the loan, they must be able to prepare proper deed which is known as loan agreement. This agreement allows to understand about the importance and also it explains all of the terms and condition in clear form which can settle the work in best possible manner. Bill of exchange is one of the way which will allow to maintain the relation between drawer and drawee.
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