Legal Question in Credit and Debt Law in California
A california C Corporation has two officer ( Husband wife) with a stock holding of 80% and two other stock holders (husband and wife) each owns 10% of stocks. If they take loan under SBA program and on loan documents two majority stock holders signed personal guaranty ( Being 80% stock holders) what is the liability of remaining two stock holders ( though husband and wife) each of whom has 10% holding in it. In case of default, will SBA make liable the two other small 10% stock holders being husband and wife for any default???
1 Answer from Attorneys
If the 10% shareholders do not sign the guarantee, and the corporate form is properly maintained as far as adequate capitalization, no improperly managed self-dealing, and corporate formalities maintained, the SBA should not be able to come after them in the event of default.