Commercial Contracts

Personal Guarantee

A promise by an individual to pay a company's obligation if the company does not.

Landlords, banks and some suppliers frequently ask a founder to personally guarantee a corporate obligation. A guarantee usually survives the sale of the business unless it is expressly released in writing.

Why it matters: signing one sets aside the main financial protection incorporation provides, for that specific debt.

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Legal information, not legal advice. Rules differ by province and change over time. A licensed lawyer must review your matter.

Editorial status: Lawkin Editorial — pending independent legal review.

Personal Guarantee — Canadian legal glossary | Lawkin — Lawkin