What Is a Bond in Finance?
A Bond Form in finance is a debt instrument that represents a loan contract and specifies an obligation to return borrowed funds. Essentially, it is a loan agreement between the Bond issuer and the bondholder and includes the description of the loan and its payment method. When the bondholders purchase a Bond, they "loan" money to the issuers. After the loan matures, the issuer has to repay the loan to the bondholder.
Check out our library of Bond certificate templates below.
What Are the Different Types of Bonds?
There are several types of Bond certificates, and they offer bondholders different options since the specifics of any particular Bond can vary. These can be distinguished depending on the purpose of the bond and its field of application:
- Surety Bond. These are contracts between three parties that guarantee that the Principal will act in accordance with the terms established by the agreement.
- Payment Bond. These are usually obtained by contractors or subcontractors before they begin their work on a construction project. This document guarantees that the contractor will pay the subcontractors, laborers, and material suppliers on time;
- Warranty Bond. It is a bank-issued contract primarily used in construction and building business that guarantees the investor that a contractor will resolve every issue during the agreed warranty period;
- Performance Bond. This written document from a bank or an insurance company ensures payment of a sum of money to the investor in case the contractor fails to fully perform the contract for some reason;
- Bid Bond. It is a specific construction Bond obtained through an insurance company or a bank. It guarantees that the developer or owner in a construction bidding process will be compensated if the contractor fails to honor the terms and conditions of the bid;
- Bail Bond. This is the agreement used in the criminal procedure. The defendant can pay the Bail Bond to be released from jail before the scheduled trial.
What Is the Difference Between a Bond Indenture and a Bond Certificate?
A Bondindenture is a related legal document that describes the features of the loan, it’s restrictions, and possible consequences that may be triggered if the issuer does not make timely payments. It is drafted during the issuing process and is produced by the company that issues the Bonds. It is a formal contract signed by the issuer and the bondholders setting all the terms and conditions of every Bond certificate issued.
Documents
Cbp Form 301 "Customs Bond"
This form is an agreement between a principal, obligee, and surety. Fill it out as a proof of payment of fees, taxes, and duties, and to make sure you comply with the law regarding goods and activities.
IRS Form 1097-btc "Bond Tax Credit"
Download this form if you are an issuer of a certain tax credit bond, issuer's agent, or a recipient from the bond issuer or an agent in order to report a tax credit amount you are allowed for every month of the calendar year.
Dep Oil&gas Form 2 "Plugging and Site Restoration Performance Bond for Single Well" - Florida
Dep Oil&gas Form 5 "Performance Bond for Geophysical Exploration" - Florida
Form Hs-R4 "Application for Exemption From Financial Accountability (Bonding) Requirements" - Maryland
Form Foc4 "Cash Performance Bond (Civil Contempt)" - Michigan
Form Dmf-6 "New Jersey Distributor of Motor Fuels Tax Bond" - New Jersey
Form Omf-6 "New Jersey Terminal Operator Tax Bond" - New Jersey
Form Fmc-69 "Ocean Transportation Intermediary (Oti) Group Bond Form"
Form Fmc-48 "Ocean Transportation Intermediary (Oti) Bond"
Form Aid-Li-Mga43 "Managing General Agent Bond" - Arkansas
Form Jd-Cr-97 "Notice of Appearance Bond Lien" - Connecticut
Form Jd-Cl-51 "Affidavit - Lost Bond Receipt" - Connecticut
Dep Oil&gas Form 2a "Performance Bond for Multiple Wells" - Florida
Form Dol-13 "Employer's Statutory Surety Bond for Reimbursement in Lieu of Contributions" - Georgia (United States)
Form Cr-40 "Nonresident Contractor's Request for Bond Release" - Kansas
Form Tb-85 "Tobacco Products Distrbutior's Tax Bond" - Kansas
Form D-64 "Request for Copies of Reports and/Or Bond" - Kansas
Form Foc40 "Motion to Require Bond to Secure Future Support" - Michigan
Form Foc43 "Motion to Release Bond to Secure Future Support" - Michigan
Form Cc89 "Judgment After Bond Forfeiture (Domestic Relations)" - Michigan
