Fiduciary Explained

Fiduciary Factoring is based on the Agency Law which is a major part of the Common Law which one regulates the law of all Commonwealth countries.

The Agency Law allows a tierce person (usually called "AGENT") to act on his own name for and on behalf of another tierce person (usually called "PRINCIPAL"). The AGENT acts following orders received from its PRINCIPAL. The relation between them is regulated by the Agency Agreement which defines how the AGENT must conduct the business for and on behalf of its PRINCIPAL, and how much he will be paid to do so.

For example:

  1. The AGENT (English company) receives an order from the PRINCIPAL asking for the French company X, with address is 1 Rue de la Place, 75001 Paris, France, to be invoiced for €10,000 according to the commercial agreement dated 01/01/2005 based on clients' introduction. (In this example, the English company "AGENT" communicates and contracts with the final client to justify the invoicing.)
  2. The English invoice is sent by fax and by post, for the payment to be made quickly.
  3. The final client (The French Company X) pays €10,000 euros on the English bank account of the AGENT. These funds (on the AGENT bank account) belong to the PRINCIPAL.
  4. The AGENT take is commission (10 % or 12% according to the selected factoring option).
  5. The PRINCIPAL orders the AGENT to send the full balance (88% or 90% according to the selected factoring option) onto his Swiss bank account.
  6. The AGENT makes the payment onto the PRINCIPAL bank account.

Nothing more! As simple as this!