commercial paper

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commercial paper,

type of short-term negotiable instrument, usually an unsecured promissory note, that calls for the payment of money at a specified date. Because it is not backed by collateral, commercial paper is usually issued by major firms whose credit-rating is so good that their notes are immediately accepted for trading. The notes are sold at a discount and mature in from three to six months. Commercial paper is an important source of cash for the issuing firm; it supplements bank loans and is usually payable at a lower rate of interest than the prime discount rate. Strictly speaking, it includes only those instruments that are used in commerce in place of money, as distinguished from paper used in investment, personal, estate, speculative, and public transactions. In addition to promissory notes, commercial paper may include drafts, bills of exchange and checks, acceptances, bills of lading, warehouse receipts, orders for delivery of goods, and express orders. See. N. D. Baxter, The Commercial Paper Market (1969); Steve H. Nickles, Commercial Paper (1988).
References in periodicals archive ?
STOCKHOLM, Sweden -- Annual Report and discharge from liability The company's Income Statement and Balance Sheet were adopted and the Board of Directors and the Chief Executive Officer were discharged from liability for the financial year 2009.
Discharge from liability Item 8 c on the agenda The Board of Directors and the President were discharged from liability for the financial year 2009.
The Annual General Meeting granted the directors and the President discharge from liability for the 2011 financial year.