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If you are borrowing in the name of a company your bank will almost always require the directors to personally guarantee the loan.
This means that you, as the director, become personally liable for the borrowing company’s obligations under the loan in the event that the company is unable to perform such obligations.
Guarantor advice is the provision of detailed legal advice relating to the loan and requires the lawyer providing the advice to execute a “legal advice certificate”.
The lawyer needs to review the loan documents and provide you with advice as to your rights and obligations under the loan.
You need guarantor advice to satisfy the banks that you understand your rights and obligations under the loan and are becoming a guarantor of your own free will.
The reason for this is that:
The most important thing however is…
That obtaining guarantor advice and certificate to that effect does NOT protect you… it protects the bank.
Guarantor advice protects the bank from claims from claims by Guarantors that they did not understand the requirements of the loan or alternatively that they were forced to execute the documents.
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This publication has been prepared by AustAsia Group, including AustAsia Legal Pty Ltd (ACN 123 160 476).
AustAsia Legal Pty Ltd – Liability limited by a scheme approved under Professional Standards Legislation.
Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Accordingly, reliance should not be placed on the information contained in this document as the basis for making any financial investment, insurance or other decision. Please seek personal advice prior to acting on this information.
Information in this publication is accurate as at the date of writing, 10 October 2017. Some of the information has been provided to us by third parties. Whilst it is believed the information is accurate and reliable, the accuracy of that information is not guaranteed in any way.
Opinions constitute our judgement at the time of issue and are subject to change. Neither the Licensee nor any member of AustAsia Group, nor their employees or directors give any warranty of accuracy, nor accept any responsibility, for any errors or omissions in this document.
Any general tax information provided in this publication is intended as a guide only and is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or an assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent.
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