Business owner Assets Protection Checklist

Business Owner Resource

Protect what you built before you sign.

Commercial financing can support growth, but personal guarantees, security agreements, covenants and director obligations may expose more than the corporation. Review the structure before funds are advanced.

Review the 10 Questions Book a Consultation
Clear guidance for owners, shareholders and directors.
Commercial financing review Personal guarantee analysis Corporate risk planning
10questions before signing
2levels of possible exposure
6documents and checks to review
1plan before funds advance
The Ten Questions

What every business owner should ask

Use these questions to uncover the borrower, security, guarantee, enforcement and personal-liability terms inside a financing package.

01

Who is actually borrowing?

The operating company, a holding company, a related entity or you personally—and does that match the loan's purpose?

02

Am I being asked for a personal guarantee?

A guarantee is a separate promise that can reach personal assets if the business defaults.

03

Is the guarantee limited or unlimited?

Some are capped; others extend to principal, interest, fees and future advances.

04

Are obligations joint and several?

One guarantor may be pursued for the full amount regardless of internal owner arrangements.

05

What business assets are pledged?

Review every general security agreement, PPSA registration and specific charge before closing.

06

Could personal assets also be tied in?

Corporate-level security does not cancel personal exposure where a separate guarantee exists.

07

What covenants and approval rights apply?

Reporting obligations and lender consent over asset sales or distributions can constrain decisions.

08

What actually happens on default?

Map enforcement step by step: corporate assets first, then guarantors for any shortfall.

09

Do director duties create separate risk?

Directors can be personally liable for payroll remittances, HST, unpaid wages and environmental matters.

10

Does this fit the wider protection plan?

Financing should align with ownership structure, insurance, succession and estate documents.

Corporate vs. Personal

What the corporation may shield—and what it may not

Incorporation creates separation, but guarantees, indemnities, covenants and statutory director duties can significantly narrow it.

✓

Usually protected

  • Business debts are generally corporate obligations rather than personal shareholder obligations.
  • Corporate assets are typically the first assets a secured lender enforces against.
  • Shareholders do not assume statutory director duties simply by owning shares.
  • Without a personal assumption of debt, business and personal balance sheets remain separate.
!

Often not protected

  • A personal guarantee makes an individual directly responsible for the business debt.
  • If corporate assets fall short, a lender may pursue guarantors for the shortfall.
  • Directors can face personal liability for payroll remittances, HST and unpaid wages.
  • Guarantees, indemnities and covenants can narrow corporate separation.

Before you move forward

Map every entity, asset, guarantee, security interest and decision-maker in the transaction—then review the structure before funds are advanced.

EntitiesAssetsGuarantees
Before You Sign

Six checks that deserve attention

  • Request the full loan package—not only the commitment letter.
  • Review every guarantee separately from the credit agreement.
  • Confirm whether the guarantee is capped, time-limited or continuing.
  • Identify all pledged collateral and ongoing reporting covenants.
  • Check whether spouses, holding companies or related entities are drawn in.
  • Align the loan with shareholder, insurance and estate documents.
A Practical Review

A clearer way to assess the transaction

Step 01

Collect

Obtain the complete loan, guarantee and security package.

Step 02

Map

List each borrower, guarantor, asset and security interest.

Step 03

Test

Review default, enforcement, covenant and consent provisions.

Step 04

Align

Coordinate the financing with the wider ownership and protection plan.

Common Questions

Commercial financing and personal exposure

No. Corporate debts are generally separate, but a personal guarantee, indemnity, statutory director liability or other personal undertaking can create direct exposure.

The guarantee is a distinct promise. Its cap, duration, continuing effect and coverage of interest, fees or future advances may differ from the main credit agreement.

Identify each entity, borrower, guarantor, pledged asset, security interest, covenant and person with approval or decision-making authority.

Review the structure before the obligation becomes permanent.

Early planning creates options. Late advice often manages consequences. Speak with Mann Law about your commercial financing and asset-protection plan.

General information only. This section is not legal, tax, accounting or financial advice and does not create a solicitor-client relationship.
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