A Trust Receipt is a document to give physical possession of the goods or an asset to a borrower with the bank retaining the ownership of the asset or goods. It is used when a buyer has a loan or any other arrangement from a bank to buy an asset or goods and serves as a promissory note to the bank that the loan amount will be repaid.
The borrower will get the title of the goods back when he/she makes repays the loan to the bank. If the borrower fails to repay, the bank has the right to sell the asset.
This document can be used as the base for a Trust Receipt, where it outlines the conditions regarding the warehousing and sale of the goods as well as the Bank's title over the Goods.
This document should be carefully read by the Borrower and the Bank.
Both the Borrower and the Bank should sign and return a copy, and once signed, both parties should get a copy. To avoid any future disputes, both parties may wish to have their signatures witnessed.
If either party wishes to amend the agreement in the future, both parties should agree to do so, and the original agreement and amendments should be recorded in writing and signed by both parties.
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Please get all parties to review the document carefully and make any final modifications to ensure that the details are correct before signing the document. Each party should have a copy of the executed document. The document should be signed by the authorised signatory (or 2 directors for a company) and witnessed to complete the formality.