What is a "guarantee"?

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This is going to sound so dumb, but that’s why these things are anonymous, right? When we talk about limited by guarantee, what does the “guarantee” bit mean? Lol, sorry for sounding dumb. I am just totally new at this whole running a business thing. Can you tell?

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A guarantee is form of financial security. It is the sum of money a guarantor agrees to give to the company if it cannot pay its bills. It’s normally just a nominal amount of £1. This is the limit of the guarantor's liability for company debts.

A guarantor is the person who owns the company and is registered at Companies House as a ‘member’ of the company. You must have at least one guarantor, each of whom must guarantee a sum of money to the company.

a year ago
 

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