Independent Legal Advice for Company and Trust Borrowers

When a company, unit trust or family trust borrows, the lender usually wants the directors, and often the people behind the trust, to guarantee the loan personally and to receive independent legal advice before they sign.

Advice on the loan, mortgage and guarantee documents
Up to 2 directors or guarantors covered in 1 Teams meeting
$800 + GST fixed fee
Usually completed within 24 to 48 hours of receiving the documents

Send Us the Loan Documents

Why lenders ask

The Borrower Is the Entity. The Guarantee Is Personal.

A company or trustee borrowing in its own name limits what the lender can recover from that entity. Lenders close the gap by asking the individuals behind it to guarantee the debt, and by requiring a solicitor's certificate that each of them understood what they signed.

This applies whether the property is bought through a company, a unit trust with a corporate trustee or a discretionary family trust. The guarantee is given personally, so it can be enforced against the guarantor's own home and assets if the entity cannot repay.

The advice covers what the guarantee extends to, how the company or trust structure sits alongside it, and what happens on default. Where the people signing have different stakes in the structure, such as unequal unitholdings, we consider whether they should be advised separately.

Corporate Legal provides legal services only - not financial, taxation, investment or credit advice. Questions about how a structure is taxed, or whether it suits the purchase, should be directed to your accountant.

Company and trust structuring

Structures we see

Who Is Usually Asked to Sign

The people asked to guarantee depend on the structure and the lender's credit policy.

Company borrowers

Directors, and sometimes shareholders, guaranteeing a loan to a company that buys or holds property.

Unit trusts

Directors of the corporate trustee and the unitholders, particularly where unitholders are unrelated or hold unequal shares.

Discretionary family trusts

Directors of the trustee company, and sometimes the appointor or principal beneficiaries.

Co-investors

Relatives, friends or business partners buying together through a shared entity, where each person's exposure can differ from their share.

Development finance

Construction and development loans, where personal guarantees often sit alongside other security.

Signing in the right capacity

Checking that each document is signed by the right entity, as trustee of the right trust, which lenders and their certificates depend on.

Borrowing through a company or trust?

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The process

How the Advice Is Arranged

Send the loan pack

The loan agreement, guarantees, mortgage and the lender's certificate form, with the company extract or the trust deed if the lender has asked for it.

We review the documents

We check the pack is complete, that the right entities are named and that the certificate form matches the people signing.

Teams meeting

The directors or guarantors attend, we sight identification and go through the documents with them.

Certificate returned

The documents are signed and the certificate goes to you, your broker, your conveyancer or the lender.

What the $800 + GST fee covers

Review of the loan and guarantee documents, 1 Microsoft Teams meeting for up to 2 directors or guarantors attending together, and a signed certificate for each of them. Reviewing a trust deed to confirm the trustee can borrow and give security, advising more than 2 people, or advising people separately where their interests differ is quoted before we start.

Have the loan documents?

Send Them Through

Why a Structure Does Not Limit a Guarantee

Personal assets are exposed

A guarantee can be enforced against the guarantor's own property, whatever protection the company or trust gives the entity itself.

Unequal stakes, equal liability

Guarantees are commonly joint and several, so a unitholder with a small share of the trust can be pursued for the whole guaranteed debt.

Not proceeding is a valid outcome

The certificate records that you understood the documents. Deciding not to sign on those terms is also a legitimate result of the advice.

Questions about a guarantee?

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Questions About Company and Trust Loan Advice

Why do I need independent legal advice if the company or trust is the borrower?

Because you are being asked to guarantee the loan personally. The lender wants evidence that you understood the guarantee before signing, so it is harder to challenge later on the basis that you did not.

Can 2 directors be advised together?

Yes. Where up to 2 directors or guarantors attend the same Teams meeting and their interests are aligned, 1 fixed fee covers both. Where their stakes differ, such as unequal unitholdings, we raise whether separate advice is needed and quote first.

Is my guarantee limited to my share of the unit trust?

Usually not. Most guarantees are joint and several, which means the lender can recover the whole guaranteed amount from any 1 guarantor. We check the wording of your guarantee in the meeting.

Do you review the trust deed?

Not as part of the fixed fee. Some lenders want confirmation that the trustee has power to borrow and grant a mortgage, and that review is quoted separately when it is needed.

Do you advise on tax or on the structure itself?

No. We advise on the legal effect of the loan and guarantee documents. Questions about tax or whether the structure suits you are for your accountant.

How long does it take?

Usually within 24 to 48 hours of receiving the complete documents, depending on when everyone signing can attend.

Ready to arrange the advice?

Send Us the Loan Documents

We will confirm what the lender needs and book a Teams meeting with everyone who is signing.

Send Us the Loan Documents