Summary
- Personal guarantees in commercial leases can expose business owners to significant personal liability, even if the lease is in the company's name.
- Landlords often require directors or majority shareholders to guarantee leases for added security, especially with companies lacking substantial assets.
- Liability under a guarantee may persist even after selling the business, leaving former owners at risk for the entire lease term.
- Both parties should seek legal advice to fully understand their obligations and risks before entering into a lease agreement.
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