Legal bond
Pradeep
(Querist) 22 August 2011
This query is : Resolved
Respected Experts
I am in need to know about the legal bond.
Judicial Bond :-
1) Its legality
2) Why it is used?
3) Limitation
Non Judicial Bond :-
1) When it is used?
2) when bond purchased, the bond purchaser must be present, and his/her signed must be on bond as well as bond maintain register? Is it necessary?
3) Legality of Bond.
4) In Market, from Rs.50 to onwards bonds are there. My question is that, how to know which bond is required for :-
i) Miscellaneous Work
ii) and another imporant work
Sir,
I also want to know
the valuation of bond.
what bond is used for what purpose?
Kinds of bond?
Guest
(Expert) 23 August 2011
judicial bond is given to proceedings or closing of proceedings to abide by the conditions to the court . There is no time limit.
N-J is used for various purposes and departments eg. taluk office, RTO office, Passport office, gas connection, electricity, election nomination etc
it is given normally in the form of affidavit or under taking
amount and value= it depends on stamp/registration act of various states. check it out.
prabhakar singh
(Expert) 23 August 2011
By definition a BOND is generally a "debt" instrument issued for a period of more than one year with the purpose of raising capital by borrowing. The centeral government, states, cities, corporations, and many other types of institutions sell bonds. Generally, a bond is a promise to repay the principal along with interest (coupons) on a specified date (maturity). Some bonds do not pay interest, but all bonds require a repayment of principal. When an investor buys a bond, he/she becomes a creditor of the issuer. However, the buyer does not gain any kind of ownership rights to the issuer, unlike in the case of equities. On the hand, a bond holder has a greater claim on an issuer's income than a shareholder in the case of financial distress (this is true for all creditors). Bonds are often divided into different categories based on tax status, credit quality, issuer type, maturity and secured/unsecured (and there are several other ways to classify bonds as well). U.S. Treasury bonds are generally considered the safest unsecured bonds, since the possibility of the Treasury defaulting on payments is almost zero. The yield from a bond is made up of three components: coupon interest, capital gains and interest on interest (if a bond pays no coupon interest, the only yield will be capital gains). A bond might be sold at above or below par (the amount paid out at maturity), but the market price will approach par value as the bond approaches maturity. A riskier bond has to provide a higher payout to compensate for that additional risk. Some bonds are tax-exempt, and these are typically issued by municipal, county or state governments, whose interest payments are not subject to federal income tax, and sometimes also state or local income tax.
All these bonds are legal as debt instrument and for consideration with promise to pay enforceable by court of law
within limitation of 3 years from due date
or as stipulated in law of limitation of the fora where one chooses to proceed to enforce ones'remedy.
These are general BONDS creating a relation of creditor and debtor.
Judicial BONDS are those one as explained by Expert : S.GANESAN.LAWYER,to state a BAIL bond ,a guarantee bond undertaking to fulfill obligation imposed by a decree or order.
One can go through Stamp Act to know several types of bonds and duty payable there on.A dew are given below:
DIFFERENT TYPES OF BONDS:
1)Zero coupon bond-This bond is issued at a discount and repaid at a face value.No periodic interest is paid at the time of maturity.The difference between the issue price and the redemption price represents the return of the holder.
2)Deep discount bond-This bond is issued at a very high discount on its face value and face value is paid at the time of maturity.IDBI and SIDBI had issued this instrument .IDBI had issued deep discount bond of face value of Rs.1 lac at a price of Rs.2,700/- with a maturity period of 25 years.The bond appreciates to its face value over the maturity period of 25 years.Alternatively,the investor can withdraw from the investment periodically after 5 years.
3)Convertible Bond-A bond gives the investor the option to convert the bond into equity at a fixed conversion price.
4)Dual convertible bond-A dual convertible bond is convertible into either equity shares or debentures/preference shares at the option of the investor.
5)Stepped coupon bonds-Under stepped coupon bonds,the interest rates is stepped up or down during the tenure of the bond.The main advantage to the investor is the attraction of higher rate of interest in case general rise in interest.
6)Disaster Bonds-These are issued by companies and institutions to share the risk and expand the capital to link investors return with the size of investors losses,the smaller the return and vice-versa.
7)Easy exit bonds-Easy exit bonds are bonds which provide liquidity and easy exit route to the investor by way of redemption where investor can get ready encashment in case of need to withdraw before maturity.
8)Floating rate bonds and notes-In this case,interest is not fixed and is allowed to float depending upon market conditions.This instrument is used by the issuer to hedge themselves against the volatility in interest rates.
9)Capital Indexed Bonds- These bonds are inflation protection securities.Such bonds,therefore,provide good hedge against inflation risk.The return to the investors in these bonds is connected with the wholesale price index.
10)Commodity Bonds-Commodity bonds are bonds issued to share the risk and profitability of future commodity prices with the investors.For example,Petro bonds,gold bonds ,silver bonds etc.
11)Industrial revenue bonds-These are issued by financial institutions in connection with the development of the industrial facilities.These may become attractive if certain income tax and wealth tax concessions are offered.
The bond proceeds could be used to purchase or construct facilities which are subsequently leased or sold to the company.
The test of legality of BOND like any agreement is subject to provisions of Indian Contract Act.
J K Agrawal
(Expert) 23 August 2011
Word Bond denotes to so many things. Please ask a real problem so that one can understand what do you want to know.
girish shringi
(Expert) 27 August 2011
I do agree with Mr.Ganeshan & Mr. Siongh.
