Ann: Change in substantial holding , page-85

Extract from Corporations Law 1.5

1.4 Director's liability as guarantor/security over personal assets

As a matter of commercial practice, a bank, trade creditor or anyone else
providing finance or credit to a company may ask a director of the company:

· for a personal guarantee of the company's liabilities; and

· for some form of security over their house or personal assets to secure the
performance by the company of its obligations.


The director of a company may, for example, be asked by a bank to give a mortgage over their house to secure the company's repayment of a loan. If the
company does not repay the loan as agreed with the bank, the director may lose
the house.