Can a company be a guarantor to another company?



I have been asked to sign on to a new limited by guarantee company as a guarantor. I have great faith in the idea and those behind the business, who are relatives. Rather than name myself a guarantor, however, I would much prefer to list my limited by shares company as the guarantor. Is this feat possible?

Alexander Hammond



Hi Alexander,

Yes, your limited company can be a guarantor of another company because it is classed as a legal ‘person’, which means it can act in that capacity. If the other company becomes insolvent, your company will be liable for the guaranteed sum, not you personally.

2 years ago

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