2.4.  Forms of Ownership

Prior to 1983, bond certificates were issued as bearer bonds. Bearer bonds are bond certificates that have no name printed on them and that have coupons attached. Anyone who possesses a bearer bond certificate may present a coupon to receive an interest payment or present the bond itself for payment at maturity.

With these highly negotiable instruments, an owner can receive interest payments anonymously without having to declare them at tax time. As a result, the Tax Equity and Fiscal Responsibility Act of 1982 prohibited their further issuance, although many 50-year bonds still remain active.

Registered bonds are physical certificates issued to the bondholder with the owner’s name printed on them, and they have no coupons attached. Instead, the issuer’s transfer agent sends the interest to the bondholder when payments are due and sends the principal at maturity. Registered bonds can be transferred to another individual only with the owner’s signed endorsement; the owner must present the endorsed certificate to the