Investors will buy into either
shares issued by a company or lend via bonds to a company registered in the
A bond is a simple debt instrument,
like an IOU, issued by companies who wish to raise money for their business.
Often they can be known by other names, such as Loan Notes or Debentures, and
sometimes they come with the benefit of security. That is to say the company,
or the directors, pledge assets to secure the value of the debt, which become
the property of the bond holder in the event of a default.
An explanation of the risks
and terms of the bond offer with be provided both before an investor makes an
investment decision and again once the investment has been made.
Shares are ownership rights in
a company and, depending on the terms of the offer, give the investor rights to
share in the profits of the business by way of dividends, benefit from any sale
of the company and to vote on matters relating to the company at annual and
special meetings. The terms of any share issue along with potential tax
implications of any offer are contained in the offer document, along with the
risks in regard to any investment and are provided both before an investor
makes an investment decision and again once the investment has been made.
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