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Directors’ Guarantee and Mini Clause

£24.00

When Do I need to Use this Agreement?

You may conduct a credit search on a new client and find them either not to have a good credit history, or no credit rating at all as they are a new company. This is quite common as more people are taking the opportunity to develop their own businesses. This may cause you concern about extending credit, but did you know that you can obtain a personal guarantee from the director(s) to protect your business?

Description

Director’s Guarantee Agreement and Mini Clause

When Do I need to Use this Agreement?

You may conduct a credit search on a new client and find them either not to have a good credit history, or no credit rating at all as they are a new company. This is quite common as more people are taking the opportunity to develop their own businesses. This may cause you concern about extending credit, but did you know that you can obtain a personal guarantee from the director(s) to protect your business?

Isn’t this really complicated?

No! This Guarantee document is a simple template agreement which allows someone/a business who is offering credit (the creditor) to a company to take a personal guarantee from a director of that company. The director will be promising to repay the creditor in the event that the company is unable to pay.

I don’t want a fixed amount; can I amend it?

Yes, you can. This agreement can be customised so that the director makes an unlimited guarantee (not limited to a specific amount of money) or, alternatively, it can be limited to a maximum specified sum of money (e.g. limited to £1,000).

Do I have to wait until the company is insolvent or sue them before I use this guarantee?

No you don’t. This agreement also means that the creditor is not obliged to pursue the company directly if it fails to pay, but can enforce the guarantee by demanding that the director makes repayment.

Can the Director(s) cancel the guarantee and what happens if that occurs?

The director can end the guarantee by giving 14 days’ notice to the creditor. However, the director will still be liable for guaranteeing repayment of any credit that the creditor has given to the debtor until that 14 days’ notice period has passed.

 

THIS DOCUMENT CONTAINS THE FOLLOWING:

  • Obligations
  • Ability to customise for unlimited or limited amounts of credit
  • Terms of guarantee
  • Guarantor’s obligations
  • Termination

 

DO NOT USE THIS DOCUMENT IF YOU

  • Intend to create any form of actual credit agreement rather than a guarantee
  • Want to create a guarantee for anything other than the repayment of money
  • Need specialist documents for complex guarantees which are dependent only on certain triggers

Please note that this guarantee document does not include the actual credit agreement between the company and the creditor.

Is this Document Easy to Use?

Yes, it is! This is a MS Word document and is really easy to use. The document uses blue text to provide extra guidance and notes and green text where you will customise your document to suit the circumstances in which it is used. For most people it takes 5 minutes or less.