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Associate Member Article

 

 

 

The Personal Guarantee Dilemma: Should a Director Succumb to a Personal Guarantee?

Published June 2017 

There are two fundamental principles in company law. First, every company has its own legal identity, which is not the same as the identities of its shareholders and directors. Secondly, in the case of limited companies, which take up the vast majority of companies in England, the liability of shareholders is limited: shareholders are liable to pay for their shares, but they are not liable for the company's debts.  

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