If a LLC company signs a lease and the members of the LLC signed as a Guarantor of the lease, and the LLC goes out of business, is the Guarantor responsible for the lease?
2 Answers from Attorneys
Generally, the Guarantor would be responsible for the remaining amount of the lease. It all depends on the terms of the lease and guaranty.
As a Franchise Attorney I think you need to consider the definition of a "Guarantor." It's a person or entity who guarantees the obligations of another in the event that other person or entity doesn't pay. That's exactly why the Guarantors in this case were required to guaranty the lease. Landlords like to be able to pursue real people who have assets if the rent is not paid. Consult with a good business or franchise attorney in your area for specific advice.
Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.
Franchise Foundations, a Professional Corporation
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