S corp 3 partners no contract. open for 90days, applying for a business line of credit. what liabilities if 1 partner walks away, sue personal assets
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
S corp 3 partners no contract. open for 90days, applying for a business line of credit. what liabilities if 1 partner walks away, sue personal assets
Asked on May 31, 2009 under Business Law, Washington
Answers:
J.M.A., Member in Good Standing of the Connecticut Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
The lender of the line of credit is most likely going to require you each to sign as a guarantor of the line of credit. A guarantor is ultimately liable if the company fails to pay. the bank can go after one guarantor or all of them. I suggest each of the partners signs as a guaratee on the loan so that all of you are equally liable to the bank. that way, if one walks away, that person is still on the hook.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.