What are a guarantor's responsibilities?


Hi! I’m panicking a bit. I wanted to set up a limited by guarantee company as part of a new community club in Forfar, Scotland, and didn’t realise this company type needs to have a guarantor. As I was setting this up myself, I stuck my own details on the application. Now, though, I’m nervous. I don’t even know what a guarantor is supposed to do! What are their responsibilities? And what will be expected of me? Thank you!



As the owner of a limited by guarantee company, a guarantor is responsible for the company’s debts up to a certain amount. The limit of their financial liability is determined by what they guarantee to the company if it runs out of money and cannot pay its debts. Most guarantees are for £1.

Guarantors are also responsible for the appointment and removal of directors, choosing which powers to grant to the director(s) of the company, and making decisions on exceptional matters that go beyond the scope of the director’s powers.

Most guarantors of small limited companies appoint themselves as directors, which means they are responsible for running the day-to-day aspects of the business as well.

2 years ago

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