Personal Guarantees

For Individuals:

• Should the worst happen and your company fails, leaving you with personal guarantee liabilities we are happy to assist. Should the problem be large (both in number of guarantees and value) you may need to consider a formal personal insolvency solution.
• In other cases the personal guarantee may be disputed or you just require an independent party to assist you in negotiating a settlement.  We can either assist you in these negotiations or recommend a specialist personal guarantee company who can work for you in order to bring the matter to a conclusion.
• We are always happy to discuss any issue with you and your client. As always there is no obligation for the initial meeting, which is confidential and impartial.

Most business owners are advised to incorporate their business and one of the main advantages is to provide limited liability status. Ordinarily, this provides protection against claims on the directors’ personal assets should the company fail.

However and particularly in the last decade, a number of creditors have demanded personal guarantees. These range from the bank or finance companies to landlords but increasingly these demands include trade suppliers.  Generally speaking the courts have adopted a stance that personal guarantees have been provided with full knowledge of the director who understands his commitment and acknowledges the giving of a personal guarantee has been properly explained.  The obligation to prove differently usually rests with the guarantor.

We have seen many examples of supplier contracts which suggest you will ‘honour the company’s obligations’. Does this suggest it is a personal guarantee or are you confirming the company will stick to the agreed terms and conditions?