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What are securities and what are they for?

Securities are one of the most important documents in contemporary commercial law, since they have a great practical application,

What are securities used for?

What are securities and what are they for? They serve a wide variety of purposes, for example, they are useful to support credits, to represent participation in corporate entities such as partnerships or to represent merchandise.
Thus, it is essential to review some of the most significant tips for handling these valuable documents:
1. In the first place, it is relevant that the title complies with all the requirements demanded by law, which are different for each one of them, in particular, but quite similar in essence, since all titles must contain the mention of the right they contain, the identification of the parties that are related to it and their handwritten signatures. In any case, the recommendation at this point is to consult a lawyer to ensure the effectiveness of the security.
2. Likewise, it is essential to define the essential basis of the document, i.e., its legal-economic function, whether the instrument is intended to guarantee a debt, to represent shares or merchandise, since this makes substantial differences in its treatment.
3. Another transcendental element of the securities is the clarity of these, in them there must not be any defects, errors in any of its data, since this would result in its ineffectiveness at the time of being demanded in the judicial courts.
4. Regarding the possibility that the titles have blank spaces, it must be said that, for this, the rule requires that instructions are established by the creator of the title, in order to be able to validly fill them in.
5. It is also important to mention the concept of the law of circulation of securities, which contains the necessary requirements for each type of security to be validly transferred or traded from one patrimony to another, thus, there will be bearer securities (which only require delivery to be transferred), securities to order (which in addition to delivery require endorsement) and nominative securities (the most demanding, which require in addition to the two previous steps, registration in a specific registry, for example, registration in the shareholder’s book).

Types of securities in Colombia

 At this point, we consider it valid to make a small enunciative enumeration of the different securities circulating in the Colombian market, as follows:

 Bill of exchange

 It is in full force and effect and is very important since its regulations are the regulatory basis for many other titles.

Promissory note

It is a document mostly used to guarantee debts and is very useful.

 Check

A document that used to be used for the payment of obligations, its practical value has declined considerably in recent times, in favor of the agility and ease of electronic transfers and the like.

Bonds

Perhaps the strangest in the Colombian market, they are used to represent a quota of a person in a collective credit.

 Shares

They represent a set of rights and obligations of a person with a commercial company.

Bill of lading and waybill

Transcendental for international trade.

Invoices

Complex titles, which have accounting, tax and exchange functions, these documents are widely used in our day to day life. Finally, it is necessary to understand the securities as documents with specific temporal validity, with this we mean that the rights they contain can generally be extinguished by the passage of time or the legal actions to collect them may lose their viability, therefore, they must be used at the right time and with the support of legal professionals.

Conclusion of securities

In conclusion, these documents represent an extremely useful tool in Colombian commerce, for this reason it is important that they are studied and used with great care and hopefully always with the support of expert lawyers in the field.
Always remember to look for a good law firm to support and advise you at the time of payments, issue shares, make promissory notes ETC. Our commercial lawyers in Medellin are ready to solve any doubt you may have.
 
Author
Santiago Pinzon Sosa

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