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Hi, A quick question please guys. I signed a deed of guarantee…

Hi, A quick question please guys...

Hi,
A quick question please guys. I signed a deed of guarantee in respect of a Financial services company. I have resigned as a Director of the firm, and from companies house. There are still 2 guarantors who will continue trading. My concern is that the deed was not dated, is it still valid. In addition the original company I signed it for has been closed down, and I am now a director of the new firm. It does not specify what company it was signed in relation to. As a resigned director, if the company goes in to liquidation, am I liable for anything. The 2 main directors who remain have signed guarantees in respect of an over draft. The company was incorprrated before I joined, hence why I am not on the co bank accounts and a guarantor for this. Thanks Rob

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3/29/2010

Solicitor: Senior Partner, Solicitor replied 13 years ago

Senior Partner, Solicitor

Category: UK Law

Satisfied Customers: 13,510

Experience: 30 years experience in business law and related topics such as employment law

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If you have signed guarantee then the only way of being released from it is with the agreement of the beneficiary i.e. the person in favour of whom you gave the guarantee. Unless there is a termination provision in the guarantee.

However a guarantee that does not state whose liability you are guaranteeing is meaningless. if the guarantee is in respect of a company that has been closed down then your liability is limited to anything due from that company a guarantee is not transferable to another company

Customer reply replied 13 years ago

Thanks for the answer, it states the name of the firm to who I am acting as the guarantor for, ie Company X is all over the guarantee. What is not clear though is the name of the company I was working for at the time. IE I was a Director for say Smiths Ltd, and signed a personal guarantee as a Director that if Smiths goes in to administration company X can recover losses from me as guarantor. However, Smiths was closed down 4 years back and I am now under another firm say Smiths 2, and the other Directors hold guarantees to Company X. Initially Smiths 1 was set up, and I was going to sign a Guaranror form for Smiths 2 but this never happened. Af far as Im aware, I was a guaranor for Smiths 1, and the other 2 directors are guarantor for Smiths 2. Their deeds are dated, which is fine, my initial guaranor deede for Smiths 1 was not dated, and nothing was signed for Smiths 2. I have since resigned as a Director from companies house and the firm.. Do you think my liability for Smiths 1 is limited as closed down, or irrespective do you think I may have liability for Smiths 2. Happy to pay more for answers.

Solicitor: Senior Partner, Solicitor replied 13 years ago

If you gave a guarantee of the liabilities of the first company then you have no liability for the second company unless you expressly agreed to it. A guarantee of the obligations of smiths 1 does not give you any liability for smiths 2. Unless there are any outstanding claims if smiths 1 has ceased trading you should have no liability there.

Senior Partner, Solicitor

Category: UK Law

Satisfied Customers: 13,510

Experience: 30 years experience in business law and related topics such as employment law

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Customer reply replied 13 years ago

One quick matter. Not sure how I go about paying for this point. Im quite happy if you want to invoice me, I wanted to make sure this question went to you and no one else. If a Director of a limited company has a directors loan, say 20k. If the director resigned and say 3 month later the firm goes in to administration. The 20k is owed to the firm. In the event the former director does not have the ability to pay, what happens next. Am I right is saying that the former director may make an offer to the insolvency practice, in respect of affordable payments, or indeed make a reduced offer of what capital is available. This shows willingness to repay ones debts, (doen to reduce corporation tax), not actually had the 20k. I have heard rumors that if its not paid it is passed to HM revenue, and they will bill you as earned income, but a Chartered accountant has said this is rubbish and they will accept the monthly payment plan. Sorry for going on Rob

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