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

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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 12 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. 


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