Legal Question in Business Law in California

employees are not responsible for the debts of the company unless they sign saying so. Personal guarantees by anyone change that rule and make them responsible for those debts, and that includes placing their separate and community property at risk on those liabilities.

Family Code section 910(a) says "Except as otherwise expressly provided by statute, the community estate is liable for a debt incurred by either spouse before or during marriage, regardless of which spouse has the management and control of the property and regardless of whether one or both spouses are parties to the debt or to a judgment for the debt."

This pretty well sums it up. Any assets owned as community property, or community income, could be taken to satisfy any obligation flowing from the creditor's invoking of the guarantee upon the corporation's default, subject only to the somewhat limited exemptions from seizure provided in the Code of Civil Procedure.

Family Code section 913(b)(1) exempts a spouse's separate property from liability for debts incurred during marriage by the other spouse. Section 914 provides some limited exceptions to this general rule.