Guarantor Bank Loan

[mickeyg]

My wife is a shareholder and Director of a company with 2 others. Some time ago they got a company loan and overdraft refinanced into a new bigger loan. As part of this she along with the others had to give personal guarantees. Question is if she resigns as Director and relinquishes her shares can she also walk away from her guarantor responsibilities as outlined above?

 

[mf1]

No - in simple terms.

She will need to be formally released from the Guarantee obligations by the Bank. Otherwise, people could simply resign as Directors and walk away from their obligations.

mf

 

[Joe_90]

You probably know the answer.

The personal guarantee was provide to the bank in a private capacity so getting rid of the shares and resigning as a director will have no impact if the bank don't release her from the guarantee.