A borrower owes money to a bank and borrows through his "C" Corp in Minnesota, this C Corp has only 1 stockholder, question is, can we request the wife to sign a subordinaiton agreement (Possible reg "B" issue) or are our only choices do business with the owner, who does not guarantee, third party pledge agreement with the wife or a subordination of her marital interest in the corp stock ?
Answer
You should be more concerned with the spouse's interest in non-exempt personal assets, e.g. Homestead etc.
Without seeing the C Corp's financial statement it would be hard to advise, but usual best practice is to obtain maximum security in hard assets and real estate, whether via Personal Guaranty ( both H & W) or through C Corp.
Sometimes obtaining Life Insurance on borrower is also advised.
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