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  • Legal FAQs

    Shareholders agreement JV Ltd Co. Guarantor

    Hi, I have a Limited Company SPV and currently own 1 BTL company within it. I am personal Guarantor for the mortgage attached to this property. I have an investor who is becoming a joint shareholder and investing in the business (50/50 equity, profits etc.).

    My question is, as I am personal guarantor for the property I have already bought, how can I 'share' liability should anything go wrong? We plan to buy many more properties so it's just an issue for this first property.

    We are in the process of drawing up a shareholders agreement, but I'm not clear on how to deal with this aspect. Just wondered if anyone else had dealt with this type situation? Can I write something into the shareholders agreement or am I stuck with the liability?

    Thanks ,

    Ash

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    Hi Ash,

    You should really start a separate Ltd. Co/SPV as you don't want this individual having an association with your current property.  Keep them separate and have one entity with this individual that is separate to everything else.

    See - How to stay safe lending money & property JVs 


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    you can get a personal deed of guarantee drafted from this person to you which mirrors your PG to the Lender such that they take on 50% of the liability. I have done this recently for a couple of SPVs, similar scenarios

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    Thanks for the replies - I did consider setting up another company but wanted to avoid another set of accounts tbh. The investor is a family member so the risk is low but just want it clear for the future.

    I will look into a personal deed of guarantee, thanks, Ash

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