How is a bond like and IOU?

Thus a bond is a form of loan or IOU: the holder of the bond is the lender (creditor), the issuer of the bond is the borrower (debtor), and the coupon is the interest. Bonds provide the borrower with external funds to finance long-term investments, or, in the case of government bonds, to finance current expenditure.

Is a promissory note legal without being notarized?

Generally, promissory notes do not need to be notarized. Typically, legally enforceable promissory notes must be signed by individuals and contain unconditional promises to pay specific amounts of money. Generally, they also state due dates for payment and an agreed-upon interest rate.

Does an IOU need to be notarized?

In order for any IOU to be legally binding, signatures from both the Lender and Borrower is needed. And in some states, a Notary Public and a Witness is needed to sign off on the IOU as well to be valid. Check with your State to make sure you are aware of the laws.

Is an IOU legally binding?

Due to how IOUs have been portrayed in Hollywood, it does not have the greatest reputation as being a legally binding document. However, an IOU can be a powerful binding document when being used as a repayment agreement. As long as there are a lender and borrower in a transaction, an IOU can be used to set the terms of repayment.

How do you sign an IOU for someone else?

Include your signature along with your legal name. Make sure the other party signs the document. Have them put down a signature along with a legal name. If possible, have a witness (optional). Although a witness does not make or break the IOU, it’s helpful if you ever need to go to court.

What is an IOU?

What is an IOU? An IOU is a document recording a debt and an informal agreement typically to pay someone, though it can be to do something. Without memorializing the debt in a more formal written contract, the IOU is not clearly legally binding, and thus more difficult to enforce.