"Personal guarantee" required when trading under a company ?
- Thread starter puretruth
- Start date
Corporate accounts are used to insulate the owners from operational losses (trading, bakery, bars...doesn't make a difference) and a corporate account without much, if any, track record will be asked for this guarantee, not just for trading, but for stuff like rents, credit lines, equipment purchases, etc. Unless you have significant credit history for your entity, a personal guarantee will be required for anything that relies on that credit history. (Yes, businesses have credit histories too. Instead of the big three reporting agencies, corporations/businesses have their own credit databases, such as DnB).
Since the potential for significant losses exist in a trading account, you can bet your ass they broker wants to make sure you are good for any losses incurred in your account.
Since the potential for significant losses exist in a trading account, you can bet your ass they broker wants to make sure you are good for any losses incurred in your account.
Somebody has to stand for a debit, should there be one. No "walk aways" like on some mortgages.
If the corporation is a shell or has no assets, then somebody else down the the line must make any losses good.
you ask this because you do not understand what is involved. Getting a little miffed when companies do reasonable things only indicates that you need to educate yourself on business reality.
It is no more unreasonable than a storeowner asking you to pay for a new living room set on the way out, rather than trusting you to come back 2 months later, with the money.