Who applies for a company loan, and must shareholders be guarantors?

Loan agreements on behalf of a company are signed by authorised signatories. The law does not impose a general obligation on shareholders to act as guarantors, but lenders may make a guarantee a condition of the loan. The sections below apply to limited and joint-stock companies and provide general information; have your lawyer review your agreement before signing.

Who can apply on behalf of the company?

Your finance officer or accountant can prepare the application file, but the agreement must be signed by the company's authorised signatories. Who holds this authority depends on the company type, and stating upfront if an attendee lacks signing authority speeds up the process.

Limited company

Management and representation are governed by the articles of association. This duty can be assigned to one or more shareholders as directors, to all shareholders, or to third parties. At least one shareholder must have management rights and representation authority. A shareholder who is not a director cannot sign on behalf of the company simply by virtue of being a shareholder.

Joint-stock company

Unless the articles of association state otherwise and the board of directors does not consist of a single person, representation authority belongs to the board of directors to be exercised with dual signatures. The board of directors may delegate this authority to executive directors or managers, but at least one board member must retain representation authority. Check the trade registry records to see who can sign individually.

How is signing authority verified?

Signing authority is verified from the records registered and announced in the trade registry and from signature circulars. Before signing the agreement, check these three points:

Is the authority exercised with a single signature or joint signatures?
Is the authority limited to headquarters or a specific branch?
Are the registry details up to date, and is the authorised person still in office?

The lender may also request an internal corporate resolution. If you have internal limits, such as monetary caps, state them from the outset.

Do shareholders have to act as guarantors?

No, the law does not impose a general obligation on shareholders to guarantee a company loan. A guarantee is a contract, meaning the shareholder undertakes this liability with their own signature.

In practice, requiring a guarantee from shareholders or directors is common. A shareholder may refuse to sign; in that case, the lender may decline the application or request alternative security. Before acting as a guarantor, ask the fundamental question: can the company repay this loan from its own cash flow? The Firmaskor Credit Score shows the company's solvency and debt burden outlook before you make this decision.

What does a joint and several guarantee mean?

Under a joint and several guarantee, the creditor can pursue the guarantor directly without first pursuing the company. For this, the company must be in default of payment and a formal notice must have yielded no result, or the company must be manifestly insolvent. If the claim is secured by a possessory pledge on movable property or a pledge of receivables, the pledge must generally be liquidated first, subject to statutory exceptions.

Under an ordinary guarantee, the creditor must, as a rule, pursue the company first. If multiple shareholders have provided joint and several guarantees, each is liable for the entire debt. A shareholder who pays can seek recourse against the other guarantors for the portion exceeding their own share. Putting in writing beforehand how much each shareholder will assume among themselves reduces disputes.

Under what conditions is a guarantee valid?

The guarantee must be in writing and the agreement must state the maximum amount and the guarantee date. It is mandatory for the guarantor to write the maximum amount, the date, and the statement that they are a joint and several guarantor in their own handwriting.

Subsequent amendments that increase the guarantor's liability are not valid unless made in the same manner.
A guarantee given by a natural person automatically expires ten years after the contract is executed. The period can be extended under statutory conditions.
When the principal debt is discharged for any reason, the guarantor is also released from liability.

Spousal consent is not required if a shareholder or director provides a guarantee for the company's own loan. A guarantee given by a married individual normally requires the written consent of the spouse, but a guarantee given by a shareholder or director of a commercial company regarding the company is exempt from this rule.

The exception is limited to guarantees related to the company. The rule remains valid for anyone guaranteeing the debt of another company, and whether the guarantee is genuinely related to the company may be subject to dispute.

Does the guarantee end when you leave the company?

No, leaving as a shareholder or director does not automatically end the guarantee. The guarantor may remain liable within the limits agreed, and a share transfer does not extinguish the guarantee on its own.

Consult the lender before a share transfer and obtain written confirmation that you have been released from the guarantee. Any internal agreement in the transfer deed is binding only between the parties.