A Lloyd's bond is a financial instrument used in English law, typically issued for work completed or goods delivered. This type of bond allows businesses to borrow funds without being limited by existing legal or corporate bylaws regarding indebtedness. The name is derived from an English lawyer named Lloyd, who is recognized for developing this method of issuing bonds.
Lloyd's bonds are primarily used in corporate finance and can be relevant in various legal contexts, especially in commercial transactions. They provide flexibility for businesses seeking to secure funding without the constraints that typically accompany traditional debt instruments. Users can often manage related documentation through legal templates available on platforms like US Legal Forms.
Here are a couple of examples of abatement:
For instance, a construction company may issue a Lloyd's bond to secure financing for a project they have completed, allowing them to receive payment without being limited by their existing debt obligations. (hypothetical example)
| Term | Definition | Key Differences |
|---|---|---|
| Lloyd's Bond | A bond issued for work done or goods delivered, avoiding restrictions on indebtedness. | Specifically designed for corporate use, allowing flexibility in financing. |
| Corporate Bond | A debt security issued by a corporation to raise funds. | May be subject to more restrictions than a Lloyd's bond. |
If you are considering using a Lloyd's bond for your business, it's advisable to consult with a legal professional to ensure compliance with all applicable laws and regulations. Additionally, you can explore US Legal Forms for templates that can help you draft necessary documents related to the bond.
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A Lloyd's bond is a financial instrument issued for work done or goods delivered, allowing businesses to avoid certain restrictions on borrowing.