A paymaster is someone appointed by a group of buyers, sellers, investors or lenders to receive, hold, and dispense funds, commissions, fees, salaries (remuneration) or other trade, loan, or sales proceeds within the

private sector The private sector is the part of the economy which is owned by private groups, usually as a means of establishment for profit or non profit, rather than being owned by the government. Employment The private sector employs most of the workfo ...

public sector The public sector, also called the state sector, is the part of the economy composed of both public services and public enterprises. Public sectors include the public goods and governmental services such as the military, law enforcement, pu ...

. Specific titles within the

British government His Majesty's Government, abbreviated to HM Government or otherwise UK Government, is the central government, central executive authority of the United Kingdom of Great Britain and Northern Ireland.

are

Paymaster of the Forces The Paymaster of the Forces was a position in the British government. The office was established in 1661, one year after the Restoration (1660), Restoration of the Monarchy to Charles II of England, and was responsible for part of the financin ...

Paymaster General His Majesty's Paymaster General or HM Paymaster General is a ministerial position in the Cabinet Office of the United Kingdom. The position is currently held by Nick Thomas-Symonds of the Labour Party (UK), Labour Party. History The post was ...

and Paymaster of Pensions.

Purpose

The primary purpose of a paymaster is to receive fees in

escrow An escrow is a contractual arrangement in which a third party (the stakeholder or escrow agent) receives and disburses money or property for the primary transacting parties, with the disbursement dependent on conditions agreed to by the transact ...

by buyers in a large transaction, and disburse to the sellers and brokers on the transaction. A paymaster is usually, but not required to be, a

lawyer A lawyer is a person who is qualified to offer advice about the law, draft legal documents, or represent individuals in legal matters. The exact nature of a lawyer's work varies depending on the legal jurisdiction and the legal system, as w ...

(also known as a 'lawyer paymaster'). When dealing with commission payments on

contract A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more parties. A contract typically involves consent to transfer of goods, services, money, or promise to transfer any of thos ...

s dealing with large amounts of money (such as oil, gas, steel, iron, gold, MTNs, VGs, t-strips, and other instruments), most banks in the United States are very wary of handling such large amounts of money. In addition, most buyers and sellers of such transactions want to place the money with a neutral third party for disbursement. In most cases, the buyer and the seller involved in the transaction require a paymaster be named to handle all incoming and outgoing funds. A paymaster is a neutral third party and has no knowledge of any particulars of the transaction. They handle the incoming commissions, and then disburses the funds accordingly. In return for their services the paymaster charges a small fee, which is paid directly to them out of the commission proceeds prior to disbursement.

Requirements for position

In the United States, there is no licensing requirement to be a paymaster. However, a paymaster often is a licensed lawyer, due to the security and safety issue that lawyers in the United States are required to hold any funds that do not belong directly to them in an "Attorney's Trust Account" (also known as an IOLTA account), which is monitored by the state bar, in the state in which the lawyer practices.

Military

United Kingdom

In 1797, the British Army first appointed paymasters with an Army rank, initially that of captain; they had previously been civilian agents appointed by colonels. In 1878, the

Royal Army Pay Corps The Royal Army Pay Corps (RAPC) was the corps of the British Army responsible for administering all financial matters. It was amalgamated into the Adjutant General's Corps in 1992. History The first "paymasters" existed in the army before the fo ...

was formed, existing until 1992, when it was amalgamated into the

Adjutant General's Corps The Adjutant General's Corps is a corps in the British Army responsible for many of its general administrative services, named for the Adjutant-General to the Forces (now the Commander Home Command). As of 2002, the AGC had a staff of 7,000 peop ...

United States

In the

American Civil War The American Civil War (April 12, 1861May 26, 1865; also known by Names of the American Civil War, other names) was a civil war in the United States between the Union (American Civil War), Union ("the North") and the Confederate States of A ...

era, a paymaster was generally a commissioned person in the army who held the rank of captain or major, depending on cumulative time in service of the person and the period in which they served (the regulations changed over time)."Pay Department" from the ''History of the War Department of the United States''
Broderick, Justin T

''uniform-reference.net website''. Retrieved November 19, 2021. The navy was similar, with the equivalent rank as lieutenant, lieutenant commander or commander.

References

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