Corporate Guaranty A contract by which a guarantor assumes liability for the debts or obligations of another in the event of a default.

When one corporation A corporation may be defined as a voluntary association of persons who are organized under state or federal law and recognized by the law as having a corporate name, and being entirely separate and distinct from the people who own it; having continuous li guarantees the obligations of another corporation, a "corporate guarantee (See Guarentee.) " is created. This also means that the guaranteeing company assumes a contingent liability Potential obligation that will materialize only if certain events occur in the future (e.g., a parent guaranteeing the debts of a subsidiary). and must so indicate, particularly if it is a public company. If a guarantee of another corporation, an affiliated corporation, a parent or a subsidiary A company, usually a corporation, that is controlled by a parent company. is obtained, the credit The privilege of buying goods, services or borrowing money in return for a promise of future payment. manager should always get a copy of the corporate resolution authorizing it and insure that the official corporate seal should be placed on the documents. A parent corporation can guarantee the debt of its subsidiary. In addition, consideration should be made that unless there is a clear benefit to the guarantor A person who assumes liability for (guarantees) the debts or obligations of another in the event of a default. executing the guaranty, a defense could be created that would deny money A medium of exchange; coined or stamped currency. to a creditor A person, business or governmental agency with a claim against a debtor or debtor's business. claim A right to payment or other equitable remedy in the event of a breach of contract. against a debtor or business entity that owes money. or debtor's business. clai A right to payment or other equitable remedy Relates to the judicial means or court procedures by which legal and equitable rights are enforced. in the event of a breach of contract. m against a debto or business entity that owes money. r or debtor 's business. who is pursuing the parent guarantor.