Which endorsement indicates a new owner of a check?

Which endorsement indicates a new owner of a check?

• A. Blank Endorsement
• B. Special Endorsement
• C. Restrictive Endorsement
• D. Open Endorsement

Answer: (B)

A special endorsement is used to transfer the ownership of a check from one party to another. When a check is endorsed with a special endorsement, it includes the signature of the original payee followed by the name of the new payee. This explicitly indicates that the check is being transferred to a new owner, who can then deposit or cash it. In contrast, a blank endorsement merely involves the signature of the payee on the back of the check without specifying a new payee. This allows anyone who possesses the check to cash or deposit it, but does not formally assign ownership to another individual. Restrictive endorsements, such as "For Deposit Only," limit how the check can be handled, while an open endorsement does not designate a specific receiver and is less secure. Thus, the special endorsement is the definitive method for indicating a change in ownership of a check.

A special endorsement is used to transfer the ownership of a check from one party to another. When a check is endorsed with a special endorsement, it includes the signature of the original payee followed by the name of the new payee. This explicitly indicates that the check is being transferred to a new owner, who can then deposit or cash it.

In contrast, a blank endorsement merely involves the signature of the payee on the back of the check without specifying a new payee. This allows anyone who possesses the check to cash or deposit it, but does not formally assign ownership to another individual. Restrictive endorsements, such as "For Deposit Only," limit how the check can be handled, while an open endorsement does not designate a specific receiver and is less secure. Thus, the special endorsement is the definitive method for indicating a change in ownership of a check.