What is a personal guarantee ?

A common commitment to secure a loan

To guarantee the repayment of a loan, it is common practice to ask the director of the borrowing company to act as a personal guarantor. This commitment binds them with their own assets: should the company default, the director will be personally liable for repaying any outstanding debts.

A mandatory formality to validate the commitment

Since the reform of the law on security interests came into force on 1 January 2022 (Article 2297 of the Civil Code), a natural person acting as a guarantor must personally include a statement acknowledging their commitment as a guarantor, specifying the principal sum and ancillary costs in words and figures. This statement no longer needs to be handwritten in the strict sense: it may be provided electronically provided that the signatory’s identity is verified in accordance with the conditions laid down by law. In the absence of this statement, or if it is incomplete, the guarantee may be declared null and void.

What happens in the event of the director’s death?

In the event of the director’s death, the undertaking is passed on to their heirs as part of the estate, but only if the heirs accept the inheritance. An heir who renounces the inheritance does not inherit this undertaking.

Updated on: 17/09/2026