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Simple English definitions for legal terms
face-amount certificate company
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A quick definition of face-amount certificate company:
A face-amount certificate company is a type of investment company that sells certificates to people who want to save money. These certificates are like loans that the company promises to pay back with interest. The company uses the money from the certificates to invest in different things, like stocks or real estate. This type of company is regulated by the government to make sure they are honest and safe for people to invest in.A more thorough explanation:
Definition: A type of investment company that issues face-amount certificates of the installment type or has such certificates outstanding.
Example: A company that issues face-amount certificates of $1,000 each and promises to pay the certificate holder a fixed amount of money at a future date, usually after a certain number of years. The certificate holder pays a fixed amount of money in installments until the certificate matures.
Explanation: Face-amount certificate companies are a type of investment company that issue certificates to investors and promise to pay a fixed amount of money at a future date. The certificate holder pays a fixed amount of money in installments until the certificate matures. The company invests the money received from the certificate holders in various securities and earns a return on the investment. When the certificate matures, the company pays the certificate holder the face amount of the certificate plus any accumulated interest.
face-amount certificate | face-amount certificate of the installment type