FINAL PROJECT

Training program:
Masters of business Administration
Subject:
Legal Business Environment
Send to: accounting@eneb.com

ENEB Business School

 BACKGROUND

Don Manuel García Ferrer is self-employed and is dedicated to installing air conditioners.
His friend, Mr. Antonio López Hernández, has decided to set up a Business Accounting
and Taxation business. For this he needs to make an initial investment of € 40,000. As his
friend Manuel is doing very well, he has chosen to borrow from him instead of going to a
bank. Don Manuel will give Don Antonio the amount of € 40,000 by bank transfer on
September 15, 2016. They have agreed that Don Antonio will return the amount in four
annual payments. The payment of each annual fee will be made at the end of each year
with an annual interest of 4%. To document the payments, four bills of exchange
corresponding to each annuity will be issued. To make sure of the collection of the
amounts, Don Manuel has requested that the payment of the letters be guaranteed by the
father of his friend, Mr. Luis López Pérez.
Don Manuel has decided to buy a new second-hand vehicle. To pay for this acquisition,
he endorses the first letter to Doña Alicia Martínez Castro on October 01, 2016.

DEVELOP

1. Draft the Commercial Loan Agreement detailing the form of payment and including all
data that is not provided and it is necessary.
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.
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.
 CONTRACT

Madrid, Spain. Dated: September 15, 2016

Among the undersigned, Mr. MANUEL GARCIA FERRER, D.O.B, Sept 7, 1965, being
of legal age, identified with a national identity document number 12345678 with
domicile in Spain in the city of Barcelona, will be referred to as or called THE LENDER

And the other party to this agreement,

Mr. ANTONIO LOPEZ HERNANDEZ, D.O.B Nov. 15, 1982, being of legal age ,
identified with national identity document number 34567890 with domicile in Spain in the
city of Madrid, will be referred to as or called THE BORROWER.

And on the other hand 3rd party to this contract in its name and right. Mr. LUIS
LOPEZ PEREZ, D.O.B Jan.1, 1955, being of legal age, identified with national identity
document number 23456897 with domicile in Spain in the city of Madrid, from now on
will be called THE CO-BORROWER to assume the debt in case of default by the
BORROWER, Mr. Antonio Lopez Hernandez.

All parties acknowledge the legal capacity necessary to formalize this LOAN
AGREEMENT in the concept in which they intervene in it, and by the following
clauses.

CLAUSES

FIRST. - DISBURSEMENT, The LENDER lends to the BORROWER the amount of

40,000 euros, which becomes effective in this act, by bank transfer from the LENDER's
account to the BORROWER's account, number XX123.

SECOND- RETURN OF CAPITAL AND INTEREST. The BORROWER agrees to pay

the LENDER, the loaned capital with an annual interest, agreed by the parties, of 4
per cent (4 %), said interest being payable for periods due annually on September
15th for the following four years, until paid in full.
THIRD- COMMITMENT OF RETURN. The capital borrowed must be returned within 4
years, starting from the day of signing this contract.

FOURTH. - COLLECTION FROM THIRD PARTIES. THE CO-BORROWER shall be

obliged to assume the obligation of debt if the BORROWER fails to comply with
his obligations acquired by THE LENDER.

FIFTH. - PAYMENT GUARANTEE. The BORROWER issues to the LENDER with four
bills of exchange corresponding to each of the maturities, to ensure the payment of the
amounts.

SIX- DESTINATION OF THE LOAN. THE BORROWER undertakes that the money
loaned by THE LENDER will be invested only to set up a business dedicated to the
Accounting and Tax Consulting business.

SEVENTH. - NON-COMPLIANCE. The breach by the BORROWER of any of the

obligations contracted by this contract will empower the LENDER to terminate the
contract with legal consequences.

EIGHTH. - NOTICE, the effects of receiving any notification related to the rights and
obligations derived from this contract, the parties designate as addresses those that
appear at the top of this document.

NINTH. - EARLY PAYMENT, the principal and the interest can be paid by the

BORROWER before the expiration of the term.

TENTH SUBMISSION OF THE ANNUAL CAPITAL, THE BORROWER agrees with

LENDER to report on how the payment will be made with time and or place where THE

BORROWER will deliver the payment annually.

For the record of all the above, this loan contract is signed in Spain, on the 15th day
of September 2016.
 MANUEL GARCIA FERRER ANTONIO LOPEZ H.

The lender The borrower

LUIS LOPEZ PEREZ

The co-signer or guarantor

2.Determine the total amount to be paid at the maturity of each annuity with the details of
the interest calculation, as well as the total amount that Don Antonio will end up
paying for the loan received.

Capital loan 40,000 Eu

Interests 4.0%

Capital
Balance Interests Subscription Dates Total value

2017/15
40,000 1,600 10,000 / SEP 11,600
2018/15 /
30,000 1,200 10,000 SEP 11,200
 2019/15 /
20,000 800 10,000 SEP 10,800
2020/15 /
10,000 400 10,000 SEP 10,400
Total interest 4,000 40,000 0

Table 1; interest calculation detail

40,000 x 0.04 = 1,600 - Interest owing at end of year one on

Sept. 15, 2017 30,000 x 0.04 = 1,200 - Interest owing at end

of year two on Sept. 15, 2018

20,000 x 0.04 = 800 - Interest owing at end of year three on

Sept. 15, 2019 10,000 x 0.04 = 400 - Interest owing at end of

year four on Sept. 15, 2020 TOTAL INTEREST =

1,600+1,200+800+400 = 4,000

Total Principal amount paid at the end of each year 10,000+10,000+10,000+10,000 =

40,000

TOTAL OF ALL AMOUNTS PAYABLE BY MR. DON ANTONIO is 40,000+4,000 =

44,000

3. Complete the four bills of exchange with all their clauses in the official models. By
being present, all parties are accepted at the time of signing the contract.

Endorse
letter

●
Payment date: Sept 15, 2017
 ELEVEN THOUSAND SIX HUNDRED EUROS .
Drawer : Antonio Lopez

GUARANTEE ENDORSEMENT

Endorsement and signature data Pay to: Alicia Martínez Castro

Name: Luis López Pérez

ID: 23456897
I identification : 99999999
Population: Spain Tel: 900
505 682

Address: 123 Main St. Anytown, Spain Address : Calle Muelle s / n

28902 Getafe

(Madrid)

luis lopez perez Signature

_

Signature Identification

Endorsing Signature : Manuel

García Ferrer . Identification

12345678 Tel 900567890

● letter 2
Sept. 15, 2018

ELEVEN THOUSAND TWO HUNDRED EUROS .

Drawer : Antonio Lopez
MANUEL GARCIA

GUARANTEE ENDORSEMENT

Endorsement and signature data Pay to

Name: Luis López Pérez

ID: 23456897
ID
Population: Spain Tel: 900
505 682

Address: 123 Main St. Anytown, Spain

Home -

luis lopez perez

Signature
Signature

6
Letter # 3
Sept 15, 2019

TEN THOUSAND EIGHT HUNDRED EUROS .

Drawer : Antonio Lopez
MANUEL GARCIA

GUARANTEE ENDORSEMENT

Endorsement and signature data Pay to

Name: Luis López Pérez

ID: 23456897
ID
Population: Spain Tel: 900
505 682

Address: 123 Main St. Anytown, Home -

Spain

luis lopez perez

Signatur Signatur
e e
● letter 4

Sept 15, 2020

TEN THOUSAND FOUR HUNDRED EUROS .
Drawer :Antonio Lopez
MANUEL GARCIA

GUARANTEE ENDORSEMENT

Endorsement and signature data Pay to

Name: Luis López Pérez

ID: 23456897
ID
Population: Spain Tel: 900
505 682

Address: 123 Main St. Anytown, Spai

Home -

luis lopez perez

Firm
Firm
 References

Schrieber, M. D. (1986). Spain’s New Bill of Exchange Law Promotes EEC

Uniformity. International Financial Law Review, 5, 6.

https://heinonline.org/HOL/LandingPage?handle=hein.journals/intfinr5&div=128

&id=&page=

ShylaThompson. (n.d.). Spanish bill of exchange options - Finance |

Dynamics 365. Docs.Microsoft.Com. Retrieved October 25, 2020, from

https://docs.microsoft.com/en- us/dynamics365/finance/localizations/emea-

esp-bill-of-exchange-options