Deed of Personal Guarantee
Do you have a client that always has an excuse not to pay you? He tells you that he does not have money to pay you but you still see him drive away in a new BMW.
When you contract with a company, you will not be able to claim your debt directly from the directors of the company unless you get them to sign a deed of personal guarantee and indemnity. The is because a company is considered a separate legal entity at law, which means that although you might deal directly with directors or employees of a company, you may only make claims for your debt against the company.
In order for you to be able to directly make a claim for your debt against the director of a company you must get them to sign a personal guarantee or indemnity. The personal guarantee will usually state that the individuals and directors must pay the debt in the event that the company fails to pay.
It is advisable to get your clients to sign a personal guarantee and indemnity prior to you providing any goods or services to them. This will ensure that the company and the directors are liable to pay you. If a client fails to sign the personal guarantee, then it might be an early warning sign that you should not deal with them.
If you need any further information in regards to the above article, please do not hesitate to contact our team of lawyers at The Quinn Group on (02) 9223 9166 or submit and online enquiry form today.