PROFESSIONAL ENGLISH FOR COMMERCE AND MANAGEMENT

FIRST SEMESTER

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Syllabus

1. Communication (handout)

2. What is Business? (handout)

3. How to lessen financial worries and start a business (handout)

4. Franchise (Franchisor&Franchisee)

4-1. The importance of franchise

4-2. The drawbacks of franchise

5. Microeconomics and Macroeconomics

5-1. Microeconomics

5-2. Macroeconomics

6. The influence of prices

6-1. Government’s intervention

7. Two Basic Concepts in Finance: Assets and Liabilities

7-1. Assets

7-2. Liabilities

8. What is marketing?

9. The Stock Exchange Market

9-1. Stock market

9-2. Over-the-counter market

9. Functions of Commerce

10. An Export Transaction

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11.1 Methods of Payment in Foreign

12. E-commerce

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1° UNIT I - COMMUNICATION

LISTENING

Listening is the process of receiving and responding to spoken messages.

Listening is not just hearing what the other party has conveyed but actually refers
to understanding what is being said. Essential Elements of listening

1. Receiving - Hearing what is said

2. Understanding - Comprehend what was heard

3. Responding - Acknowledge the speaker by nodding

4. Remembering - Reproduce the crux of what was heard

PRE TASK: Match the words in Column A with their meanings in Column B
A B
a) Founder sudden large increase
b) pandemic someone who starts a business
c) spike something that make people believe
d) credibility feeling of great fear
e) panic disease that spreads over the whole
world

An APP for Learning - Business Interview

Listen to the passage and do the tasks that follow:

Interviewer: Welcome to today‘s show. We‘re very happy to have Mrs.Madhu

who is the creator and founder of ACE App as our guest today. This app is useful
in conducting competitive exams like NEET, JEE, NET, etc., online at home.
Thank you for coming Madhu.

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Madhu: Thanks for having me.

Interviewer: So tell us about your App. How does it work?

Madhu: Well, at this time of pandemic everything is uncertain. We do not know

when we will resume our normal life. We cannot forgo an academic year because
of Covid-19 situation.

Online classes are in full swing for schools and colleges. What about the
competitive exams like NEET, JEE,NET etc., ? These exams get postponed
because of the spike of the virus. Students who aspire IIT or medical college are
at the verge of frustration. This ACE comes to the rescue of such students.

Interviewer: Well, Madhu what motivated you to create this app?

Madhu: On seeing the frustration and panic of the students when their competitive
exams getting postponed, I was inspired to create this. Certainly this will be useful
at all times for exam conducting bodies like NTA (National Testing Agency) to
conduct exam without much infrastructure and manpower.

Interviewer: What are the features of this app?

Madhu: Student‘s register number, mobile number, digital signature and photo are
inter-linked. Even one of the above doesn‘t match the student will not be permitted
to write the exam. It is digitally secured.

Interviewer: Madhu, what do say about its credibility?

Madhu: This app will not permit electronic goods like mobile, calculator etc.
around 8 meter distance and so help from the internet is restricted. More over
when the app is activated, camera in your mobile will be on till the end of the
exam and this prevents human help. This also ensures its credibility.

Interviewer: This sounds really good. Madhu, how did you come up with the idea?

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Madhu: Well, I have my personal experience. My son‘s NEET exam is getting
postponed month after month because of pandemic. My son feels it would have
been better if he had to take up the exam at home on time. As a mother I also felt
it would be better to write the exam without being exposed to the virus. This gives
me the determination to come out with the app.

Interviewer: What is your future plan?

Madhu: We have just secured some funding and hope to expand the services to
conduct home based online semester examination for Arts and Science colleges.

Interviewer: We wish you the best of luck. Thanks again for coming in. Madhu‘s
app ACE is available for both Apple and Android devices. Next week we will
meet for another business interview. Have a great week.

A. Choose the correct answer and complete the statements given:

1. ACE is………………………………

a. a mobile b. an app c. an electronic device

2. ACE is used to conduct………………………………………..

a. board exam b. semester exam c. competitive

exam

3. The exams got postponed because of………………………

a. COVID-19 b. strike c. flood

4. ACE does not permit electronic goods around…………. metre.

a. 6 b. 8 c. 5

5. ACE is available for……………………..

a. Apple b. Android c. Apple and Android

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B. Fill up the blanks with suitable words/phrases in the brackets. (secured,
uncertain, exposed, on, expand)

1. We have just secured our funding and hope……………………….. to the

services.

2. Everything is………………………………………….. at this time of

pandemic.

3. It is digitally…………………………………….

4. Students can take up the exam without being………………………….to virus.

5. When the app is activated, the camera in your mobile will be……………….

C. You may be familiar with several apps in the android phone. Discuss
with your friend any two apps which are useful for your studies.

SPEAKING

In the field of business, speaking is a key skill that helps one to express oneself
clearly, to be successful. Moreover to buy and sell goods, to ask for good quality
and be assertive, one should be able to articulate boldly and confidently.

Source Passage1:‘Beeing Courageous

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 2. What is business?

In recent years, Western countries have been going through major changes. After
a period of 25 years following World War II in which these countries enjoyed
unprecedented growth and prosperity, some economic difficulties appeared in the
70's and early 80's .Though some of these difficulties now seemed to have
lessened, people no longer feel assured of the living standards their parents took
for granted .Besides these difficulties, a speedy development of technological
progress has brought forth some undreamed-of amusements and conveniences :
robots, video recorders, "smart" telephones" computers, that flash information on
displays in seconds. These changes have affected to a great extent traditional ways
of running business.

Managers have been forced to adopt new techniques, to tighten financial controls
and sometimes even to close plants or cut jobs. More than ever, people are
wondering nowadays what the social responsibility of business is to the society it
operates in. Is making profits the only goal of businesses? Should businesses
strive for the achievement of some other goals as well such as environmental
protection or fairness to consumers? In a traditional and very broad sense, we can
define business as all the work involved in providing people with goods and
services for a profit. Defined as such, business implies an enormous variety of
tasks.

Basic Vocabulary

• achievement = realisation • to boost = hausser, remonter, augmenter

• goal = objective, but • economic growth = croissance économique

• to lessen = diminuer • supply = offre

• demand = la demande • profit and loss = profit et perte

• environment = environement • to purchase = achat

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• to run a business = diriger une entreprise • to tighten = serrer

• labour market = marché de travail * undreamed-of= insoupçonné

Text comprehension

1) Answer the following questions.

a) How can you define business?

b) What are the goals of businesses?

c) What are the benefits of competition in a free- market economic system?

d) What did the speedy development of technological progress engender ?

2) State whether the following statements are true or false. Justify your
answer by quoting the text.

a) To reinforce financial crontole, managers were obliged to take new methods.

True/False:

‘‘…………………………………………………………………………………
……………………………………………………………………………………
……………………………’’

b) The definition of business does not imply any task.

True/False:‘‘………………………………………………………………………
………… ..’’

c) Even though Western countries have been going through major changes. The
latter do not have any impact on the traditional ways of running business.

True/False:‘‘………………………………………………………………………

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……………………………………………………………………………………
…………………………’’

3. Give synonyms for the following words:

Problems= Realization=

Handling= Decrease=

Entreprise=

4) Speaking and Writing Topics

1) Speak about the advantages and disadvantages of a market economy.

2) Influences of the speedy technological development on the labour market.

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 READING Unit 3

3. How to lessen financial worries and start a business

Pre task

Try to answer the following questions.

1. Have you ever thought about starting a business of your own?

2. Do you worry about the capital to start your business?

3. Have you thought about the space you need to start a business?

An attractive business idea, capital, and other resources are essential to start a
business; if you have the will power, anything and everything is possible. Here is
an interesting episode from

Daniel Carnegie‘s How to stop Worrying and Start Living?

How to Lessen your Financial Worries?

Mrs. Ora Snyder lives in a town of thirty thousand-Maywood, Illinois. Yet she
started in business with the kitchen stove and ten cents' worth of ingredients. Her
husband fell ill. She had to earn money. But how? No experience. No skill. No
capital. Just a housewife. She took the white of an egg and sugar and made some
candy on the back of the kitchen stove; then she took her pan of candy and stood
near the 11 school and sold it to the children for a penny a piece as they went
home. "Bring more pennies tomorrow," she said. "I'll be here every day with my
home-made candy." During the first week, she not only made a profit, but had
also put a new zest into living. She was making both herself and the children
happy. No time now for worry. This quiet little housewife from Maywood,
Illinois, was so ambitious that she decided to branch out-to have an agent sell her
kitchen-made candy in roaring, thundering Chicago. She timidly approached an
Italian selling peanuts on the street. He shrugged his shoulders. His customers

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wanted peanuts, not candy. She gave him a sample. He liked it, began selling her
candy, and made a good profit for Mrs. Snyder on the first day. Four years later,
she opened her first store in Chicago. It was only eight feet wide. She made her
candy at night and sold it in the daytime. This erstwhile timid housewife, who
started her candy factory on her kitchen stove, now has seventeen stores -fifteen
of them in the busy Loop district of Chicago. Mrs. Ora Snyder, in Maywood,
Illinois, instead of worrying about finances, did something positive. She started in
an extremely small way to make money off the kitchen stove no overhead, no rent,
no advertising, no salaries. Where there is a will, there is a way.

CARNESIE Dale, How to stop Worrying and Start Living.

A. Find out the opt words from the passage for the given meanings.

1. Enjoyment and enthusiasm

2. The money one makes in business

3. Determined to be successful, rich and powerful

4. Person who acts for or managing the affairs of other people in business

5. Shy and nervous

6. Former

7. Raise your shoulders and then dropping them to show that you don‘t care

8. Making a continuous loud deep noise

B. Say whether the following are true or false.

1. Ora Snyder had to earn money since her husband fell ill.

2. Ora Snyder sold candy near the College.

4. Ora approached Indian selling peanuts on the street.

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5. Instead of worrying about finances Ora Snyder did something positive.

C. Answer the following questions.

1. What are the ingredients of Ora Snyder‘s business?

2. How did Ora make candy?

3. How much a piece of candy cost?

4. Why did Ora need an agent?

5. How many stores did Ora own in Chicago?

D. Think-Pair-Share

- Do you have a business idea? Think about one. Find a partner and share your
idea. Listen to their idea and give your opinion.

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4. Franchise

Although owning your own business has proved to be rather risky,

many people prefer to work fourteen hours a day, seven days a week
for themselves than eight hours a day, five days a week for a large
corporation. Therefore, buying a franchise seems to be the perfect
solution because it brings together independence and a measure of
security.

*The franchise operation brings a corporation with a famous product

together with an individual desiring to start a small business.

*The franchisor grants this franchisee the exclusive right to use the
franchisor's name in a certain territory, in exchange for an initial fee
plus monthly royalty payments.

This type of operation enables the company to establish outlets for its
product or service without major capital investment. At the same time
the franchise faces less risks than an independent entrepreneur, because
the large organization provides financial and managerial assistance.
4.1 The importance of franchise

Franchising helps to solve two major problems the small businesses are
constantly faced with: lack of money and of knowhow. The franchisor
unlike many independent proprietors has enough experience to estimate
start-up costs realistically and therefore he will not grant the franchise
unless the prospective franchisee has enough money for the start-up

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costs. But if accepted, the franchisee has the advantage of being able to
buy supplies and to obtain credit and insurance at low costs.
4.2 The drawbacks of franchise

Still, there are also some important drawbacks to be considered. Chief

among the disadvantages is the monthly payment or royalty. If the outlet
does poorly, most of the profit may end up going to the franchisor.
Another drawback of franchises is that they allow very little
independence. If the business is so tightly controlled, some franchises
might in the end, feel like employees.

Although franchises can offer the small business person a good way to
set up a shop, they should be carefully considered before every decision
is made.

5. Microeconomics and macroeconomics

People involved in economic activities who want to start and run

successfully their own businesses must understand both
microeconomics and macroeconomics so that they may make sound
economic decisions.

5.1 Microeconomics

Microeconomics refers to the study of costs and revenues of individual

enterprises. Prices of individual items are set at the "microeconomics"
level, by means of the demand and supply curves. If the price of a
certain product declines, it generates a greater demand.

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Correspondingly, the supply of a product (i.e. the production) increases
following a rise of its price. By combining the demand and the supply,
the market places manage to establish a point of equilibrium where the
ideal price of a product can be found.

5.2 Macroeconomics

The macroeconomic level helps us view a national economic system as

a whole. At the macroeconomic level, the concept of circular flow
illustrates the interrelationships among businesses, households and
governments. If one looks at an economy as a giant circulatory system,
then businesses and consumer households can be regarded as two vital
organs: the heart and the lung. Each needs the other to keep going just
as the bloodstream carries in one direction and carbon dioxide in the
other, the economy carries goods and services on way and money the
other. Consumer households pay money for the goods and services
provided by businesses. With this money businesses pay for raw
materials and for the labor force which also comes from households.

6. The influences of prices

But the prices have a great influence not only on producers but on
investors as well. Therefore, the customers or the buyers are those who
through their willingness to buy a certain product basically shape the
allocation of resources and production of goods. Price affects the supply
of a product by helping business people to decide which industries to
invest in. New factories and new companies came into being because

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the market price of a certain item signaled high profit potentials to
managers and investors. These signals come largely from the behavior
of consumers.

6.1 Government’s intervention

Whereas eighteenth century economists believed that all production and

allocation decisions could be made by businesspeople on the basis of
prices set by the free-market, in our modern society, the government
can use its power to change prices or change the way resources are
allocated. Society needs things such as: police, fire protection, road
building or satellite launching, which the free-market system cannot
supply properly. This is where government intervenes, supplying public
goods and services, setting up taxes and duties to regulate business and
making transfer payments.

7. TWO BASIC CONCEPTS IN FINANCE - ASSETS AND

LIABILITIES

7.1 ASSERTS

7.2 LIABILITIES

Finance is the management function through which money is effectively

obtained and used. Managing a company's finances means thinking in
terms of two opposite categories: assets and liabilities.

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7.1 ASSERTS

*Assets' are the items 'of value that the company owns (including
money itself).

7.2 LIABILITIES

*Liabilities are debts, the sums that the company owes to other
businesses or individuals. If a company subtracts its liabilities from its
assets, it knows exactly where it stands financially: the reminder is what
belongs to the owner of the business. This is often called owner's equity,
or shareholder's equity namely the portion of a company's assets that
belongs to the owner after obligations to all other creditors have been
fulfilled.

In most corporations, shareholders' equity consists of common stock

shares of ownership of a business) sold to thousands of individual
investors through a stock exchange, plus retained earnings- the total net
income a company has earned over its life, minus the funds returned to
shareholders as dividends. Dividends are sums of money paid to
shareholders of the corporation out of earnings. There are different
kinds of assets and liabilities, each with its own advantages and
disadvantages. The short-term assets are often termed current assets and
are defined as the resources that can be turned back into cash within a
year. Raw materials, like for instance, steel, cotton, or a warehouse of
T-shirts ready to be dispatched to stores are all short-term assets. Cash
itself is a short-term asset. Others include a company's accounts

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receivable, i.e. the money that is owned to the company for items or
services it has sold. The faster any asset can be converted into cash, the
higher its liquidity. Borrowed money that must be paid back within the
year is a prime example of a short -time liability, or a short-time debt.
Other short-time liabilities include: rent, salaries, and unpaid bills for
raw materials. Companies that may have excess cash on hand for short
periods, must place it in short-term investments. The financial managers
must be informed about interest rates as well as the overall economy in
order to time borrowing to their best advantage.

7.3 Types of assets and liabilities, each with its own advantages
and disadvantages.

The short-term assets are often termed current assets and are defined as
the resources that can be turned back into cash within a year. Raw
materials, like for instance, steel, cotton, or a warehouse of T-shirts
ready to be dispatched to stores are all short-term assets. Cash itself is
a short-term asset. Others include a company's accounts receivable, i.e.
the money that is owned to the company for items or services it has sold.
The faster any asset can be converted into cash, the higher its liquidity.
Borrowed money that must be paid back within the year is a prime
example of a short -time liability, or a short-time debt. Other short-time
liabilities include: rent, salaries, and unpaid bills for raw materials.
Companies that may have excess cash on hand for short periods, must
place it in short-term investments. The financial managers must be

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informed about interest rates as well as the overall economy in order to
time borrowing to their best advantage.

8. Marketing

The business environment has been continually changing and business

people are worried about keeping up with it. Consumer values change
rapidly and competition in the market becomes fiercer. As a result,
business people’s attention focuses on customers and they try by means
of polls, interviews or questionnaires to win the customers over Even
such conservative industries as 'railroads and utilities are courting
consumers, for as one marketing consultant pointed out: "The customer
is the most important product ......... because if he doesn't like what we
have, he can go elsewhere ...." Many companies are learning that they
need not only good products but also marketing skills in order to
succeed. They must be able to identify consumer needs and to satisfy in
a mutually beneficial manner. Those people who want a given product
and can buy it constitute its market. Marketing has changed radically
over the past half century. At one-time, most firms were production
oriented and restricted marketing activities mainly to taking orders and
shipping goods. Then came sales-oriented marketing and it emphasized
selling. Since World War II, however, most large companies in the
world have shifted to a consumer-oriented approach known as the total
marketing concept. This concept relies heavily on marketing research
activities. The buyer has a say in what goods or services the company
sells. Therefore, the efforts of the company’s departments should be

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coordinated to produce what the consumer wants. Essentially marketing
research gets information about:

a) what products or services the consumers want;

b) what forms, colours, packaging, prices and retail shops they prefer;

c) what type of advertising, public relations and selling practices are

most likely to appeal to the consumer.

Population statistics are a basic marketing tool. They can indicate with
reasonable precision how many people there are, how old they are, what
they earn, how they spend their money and where they live. The reasons
why consumers decide to buy a product may be rational or\and
emotional. Rational factors include cost, dependability; usefulness.
Emotional factors are satisfaction of the senses, fear, pride, sociability
and emulation. Besides individual consumers, there are also industrial
consumers and the marketer has to adopt a different marketing strategy
for them. For instance, a major banking institution wants to overhaul its
entire computer system. The motivation for acquiring technical
business equipment or services is usually rational, based on its
usefulness to the buyer. Businesses try to avoid investing in
unnecessary services or products. Emotional motives do not influence
such buyers to a great extent. Moreover; the business buyer possesses
technical background and negotiating skills that ordinary consumers
lack.

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9. THE STOCK EXCHANGE MARKET

Securities market provides a means whereby investors can buy and sell
stocks. The two kinds of securities markets are stock exchanges and
over-the-counter (OTP) markets.

9.1 stock exchange

A stock exchange is an organization whose "members join together and

provide a trading room where members can meet to buy and sell
securities for their customers. Stock exchanges provide a key service:
they organize all the information that exists at any one moment about
the price at which investors are currently willing to buy and sell
particular stocks. They do not hold an inventory of stocks for sale, they
are merely a place for matching a buyer with a seller.

9.2 Over-the-counter market

The second, very important kind of market place for stocks and other
securities is the OTC market. This market consists of a network of
registered stock and bond representatives scattered across a country
who trade with each other by phone or teletype They provide stocks to
their customers by holding stocks in inventory. They are also ready to
purchase stock from their customers and thus they are said " to make a
market " in that stock.

They do not hold an inventory of stocks for sale, they are merely a place
for matching a buyer with a seller .The second, very important kind of
market place for stocks and other securities is the OTC market .This

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market consists of a network of registered stock and bond
representatives scattered across a country who trade with each other by
phone or teletype They provide stocks to their customers by holding
stocks in inventory .They are also ready to purchase stock from their
customers and thus they are said " to make a market " in that stock..

Many important national newspapers print reports of daily tradings in

specific stocks and bonds, along with various stock averages. The best
known average is the Dow Jones industrial index which represents an
average of thirty leading industrial stocks from the U.S.A. The name of
this average comes from two American economists C.H.Dow (died in
1902) and E.D. Jones (died in 1920). When the stock market is rising,
we speak of a bull market. When it is declining, we speak of a bear
market. The origin of these terms is rather uncertain, but you can
remember which by recalling that a bull tosses an attacked upward with
its horns while a bear wrestles downward to the ground. Business
people and investors also carefully follow other news that may have a
bearing on the market, including broad social trends and the state of the
national and international economies. Customers may also invest
through a mutual fund or an investment company in which many
investors pool their money to buy securities. Each investor owns shares
in the fund and the fund uses the pooled money to buy stocks or bonds
issued by various companies. These investment societies are especially
useful for small investors who don't have time or experience to find
investment opportunities. Due to their diversified portfolio, mutual

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funds diminish investment risks. They also offer liquidity to their
customers that can turn their shares into cash whenever they want.
Many business people are interested in the prices of the raw materials
they use to produce finished goods. These raw materials, which are
known as commodities, are traded on commodity exchange markets.
These markets operate just as the stock exchange market.

1O. Functions of commerce

Commerce as a human activity is essentially the moving of goods from

the seller to the buyer, namely the exchange and distribution of goods
and services. As the goods are almost always produced far away from
the place of consumption, their way from the producer to the consumer
is a long and complicated one. Moreover, the goods are produced in
large quantities but used in small ones. While the manufacturer has a
limited production range, the consumer's requirements are almost
unlimited in variety and it is the function of commerce to provide links
between the stages of this process and the actual tools needed to make
it work. The main functions of commerce are as following. Trade is
essentially the general exchange of goods and services between
producers and consumers. Trade consists of Home Trade including
Wholesale Trade and Retail Trade and Foreign Trade dealing with
Imports and Exports. Transport concerns the moving of goods by land,
sea or air as well as the work of agents, travellers, trade representatives,
etc., people who altogether carry it out. Communications are generally
linked to the commercial activity as a whole since no transaction is

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possible without communications. Also, without communications
endless delays and hindrances occur in all stages of commerce.
Communications are made possible through the postal and telegraph
system, telephones, facsimile (fax), E-mail, cables, radio mobile
systems and satellite. Warehousing is a major function in modern
conditions as production is usually in advance of demand and goods
have to be stored appropriately in the warehouses of the manufacturer,
wholesaler or retailer until they are required. In this respect, each
producer makes use of numerous depots at specially arranged places,
usually at the consumer's reach. This function not only enables goods
to be supplied whenever they are wanted, but also wherever they are
wanted. Warehousing also provides a central pool for goods from where
supplies may be taken at any time so that the wide fluctuation of prices
caused by glut or short supplies can be avoided. The risk of loss or
damage in a business is covered by insurance policies which render
trade secure and stable, since it enables the businessman or
businesswoman survive losses by damage, fire, shipwreck, etc.

11. AN EXPORT TRANSACTION

When an exporter receives an order from an old customer, the exporter

first acknowledges it. If the price and terms are satisfactory and the
goods do exist in stock, they are packed and made ready for dispatch.
When the indent may require goods from several manufacturers it has
to be split up accordingly and separate orders are placed with the
various firms which are given instructions as to time and place of

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delivery, make-up, packing, marks, etc. The goods are packed in lined
cases (containers) which are sent to a Shipping Firm. The shipping
agents charge a commission and relieve the exporter of a lot of
complicated formalities. The goods are sent to the port of embarkation
either by truck or rail way and the superintendent at the docks is
informed of the dispatch of the goods by a Shipping Note. Then, the
shipping company makes out the Freight Note which is sent to the
exporting firm expected to pay the amount of freight to the company. A
Customs Specification is sent to the Customs Office of the point of
shipment within six days of the clearance of the ship. This specification
gives all the particulars of the goods in compliance with the Official
Export List. The staff in the exporting firm now has all the data required
for making out the Invoice. This is usually made out in triplicate and
gives all the necessary details of the goods, the marks, and numbers of
the containers and the total value of the goods. If the Invoice is marked
Loco it means that he importer has to pay all charges from the exporter's
warehouse to his own, i.e. the charge for the containers, the carriage to
the port, the freight and other shipping charges, the insurance premium
and the cost of the Bill of Lading. The quotation F.O.B. (free on board)
means that the seller bears all the expenses until the goods are loaded
on board the ship; C.l.F. (cost, insurance, freight) means that all charges
from the warehouse to the port of destination are borne by the exporter,
while under C&F the insurance premium has to be paid by the importer.
FRANCO means a free of charge delivery to the customer's premises.

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On the back of the Invoice is printed the Certificate of Origin certifying
the origin of goods.

11. 1 METHODS OF PAYMENT IN FOREIGN TRADE

For the payment of debts and settlement of accounts in the foreign trade,
both the organization and instruments are provided by the banks with
their branches and correspondents all over the globe. 1. For bank notes
and coins the banks issue Traveler’s Cheques which can be mainly used
for traveling and personal expenses. Credit Cards also meet the same
needs. The banks provide an international system of Bank Transfers in
place of the cheques system and, in case of urgency, the payment can
be made by Cable Transfer. 2. The oldest method of payment in foreign
trade is the Foreign Bill of Exchange which differs from the Inland Bill
in two important points: the payment method and the number of copies.
The Foreign Bill of Exchange is made payable either at sight, i.e. the
day when it is presented to the drawee, or at a given period after
sight(30, 60, 90 days after sight or even later) and it is drawn in sets of
two or three copies. In case of dishonour, the Foreign Bill of Exchange
must be protested in order to protect the creditor's rights in the Bill. The
due date of the Bill is determined by the number of days after sight, e.g.
30 days after sight. The specimen given is the original Bill which is
called First of Exchange having two more copies. The drawee accepts
or pays the Bill and can either hold it until maturity or have it discounted
in his bank, thus recovering the use of his capital. When the Shipping
Documents (the Bill of Lading, Insurance Policy and Invoice) are

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attached to the Bill of Exchange they create a Documentary Bill of
Exchange and it is then sent to the bank for collection. Depending on
the arrangements between the importer and exporter, the documents
which form the title to the goods can be handed over either against
payment (D/P) or against acceptance of the Bill (D/A). The bank is
generally instructed not to present the Bill before the merchandise has
actually arrived. On the other hand, if a 47 Bill is drawn 60 or 90 days
after sight and the documents are to be released only against payment,
the importer can get possession of the documents by paying earlier, e.g.
30 days after sight. Since the disadvantage of this method is that the
exporter has to wait quite a lot before he receives the money, he often
approaches his bank for an advance on the shipment which is generally
granted on the signing of a Letter of Hypothecation, For contracts that
imply a large amount of money and time a Letter of Credit (L/C) is
preferred as a secure means of payment. The correspondent bank will
be then prepared to accept the Bill on behalf of the exporter; the
importer consequently draws the Bill on the bank and not on his
customer thus establishing an Irrevocable Documentary Credit which
gives the exporter a complete protection. The Irrevocable means that
the Letter of Credit cannot be changed or cancelled without the
agreement of all parties.

12. E-commerce

E- commerce implies Electronic commerce. It refers to the business of

buying and selling things or products online. In other words, it indicates

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the act of doing business online. There are four types of E- commerce
business models. They are,

1. Business to Consumer- B2C

2. Business to Business- B2B

3. Consumer to Business- C2B

4. Consumer to Consumer- C2C

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