Does a guarantor of business equipment get any rights of ownership to it?
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Does a guarantor of business equipment get any rights of ownership to it?
I want to start up a sole proprietorship business but don’t have credit to purchase equipment. If a relative signs for the line of credit but the equipment is under the business name, who has the rights or ownership of the equipment – the business or the said relative?
Asked on May 7, 2014 under Business Law, West Virginia
Answers:
Bradley Miller / Miller Law LLC
Answered 10 years ago | Contributor
If the equipment is under the business's name, then the business owns it. If the business is simply you as a DBA with no formal business entity (like a corporation or LLC), then from a practical standpoint you own the property of the business. If you have a business entity, such as an LLC, then as an owner (member) you may have a right to the equipment upon the dissolution of the business.
However, unless there is a written agreement giving them an ownership interest in the property, a guarantor does not have any ownership interest in either the business or the collateral - in this case the equipment.
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