What is commission in simple terms?

Types of commissions

The reason is that when a customer moves to a key account, centralizes negotiation of purchases or joins a buying group, he may start to be managed by a higher level and no longer be visited by the salesperson. In this case, the salesperson will continue to charge 1% for the opening of the customer but not the additional 2%.

The commission is paid on a monthly basis by applying the established percentage to the sales invoiced in that month. In this sense, some concepts must be taken into account: For the commission, money is needed based on percentages that must be paid monthly.

Commissions in law

Bank commissions are fixed or percentage amounts of money charged by the bank or financial institution to the client for the provision of different services: transactions, issuance of documents, contracts, negative balances and maintenance, among others.

Not all banks charge all fees equally. In general online banking, it is necessary to compare which are the banks with the lowest commissions or at least with the lowest commissions in the services that are going to be used the most.

Normally the imposition of bank commissions is the power of the financial entity, so that the client, in most of the occasions cannot negotiate and if he/she does not want to pay these commissions, he/she must look for another entity. However, in many occasions, the entities agree on commissions among themselves to avoid the flight of clients. These pacts or price agreements are anti-competitive and can lead to fines and penalties for the entities.

Read more  Can I grow an orange tree in Florida?

The fundamental criticism is that in today’s economy the citizen cannot do without banking services. The customer cannot clearly choose the services and cannot avoid the intermediation of a financial institution for the payment of salaries or payrolls or pensions in cash. Nor can the customer pay many utility bills directly to the utility company (electricity, gas, etc.). In other words, there is no real alternative to these procedures, so that the charging of commissions is considered a ‘discretionary’ tax by the entities.[5][6] The financial institutions are not allowed to charge commissions.

What is a commission in finance

In other words, a commission agent sells on behalf of another person, charging a commission for it. Such consideration is usually calculated as a percentage of the amount actually collected of the transaction amount.

It may be, for example, that the commission agent is in charge of the business operations of a Chinese exporting company in a specific foreign territory. Thus, the intermediary offers the Asian firm’s products to potential importers under the terms of sale that the seller has arranged.

The main difference between a commission agent and an agent is that the former is usually paid for occasional work. On the other hand, the agent contract establishes a relationship that will be continuous over time.

Commission economy

A document issued by a Commission or Commissions that proposes a resolution or decision on one or several initiatives or propositions. For it to exist, it must be signed by the majority of the members of the Commission, contain an expository part of the reasons on which it is based and conclude with clear and simple propositions that can be submitted to a vote (the bill, decree or point of agreement itself). The opinion is submitted to the Plenary of the House, which will discuss it and approve or reject the determination proposed by the Commissions.

Read more  What does the United Nations Economic Commission for Europe do?

The opinions normally contain: introduction (also called proemio), which specifies the name of the Commission or Commissions in charge of the opinion and the proposed bill or decree; background, consisting of a chronological account of the facts since the presentation and turn of the corresponding initiative or proposal, in order to place the matter in time and space; considerations, which are the legal, doctrinal, social, political, economic and/or cultural arguments on which the decision proposed by the Committee is based; resolution points, which contain the bill, decree or point of agreement that the Committee or Committees submit to the consideration of the Assembly; and the signatures of the members of the Committee, which express the sense of the vote of each one of them in relation to the bill in question. If the majority of the signatures are in the sense of approval, the opinion may be submitted to the Plenary of the House.

What is commission in simple terms?
Scroll to top