What is a trust receipt transaction?
It is any transaction between the entruster and entrustee:
1. Whereby the entruster who owns or holds absolute title or security interests over certain specified goods, documents or instrument, releases the same to the possession of entrustee upon the latter’s execution of a TR agreement.
2. Wherein the entrustee binds himself to hold the designated goods in trust for the entruster and, in case of default, to sell such goods, documents or instrument with the obligation to turn over to the entruster the proceeds to the extent of the amount owing to it or to turn over the goods, documents or instrument itself if not sold. (Sec. 4, P.D. 115)
What is a trust receipt (TR)?
It is the written or printed document signed by the entrustee in favor of the entruster containing terms and conditions substantially complying with the provisions of PD 115.