Document background
The Personal Guarantee Agreement is a fundamental security document in Malaysian business and finance transactions, commonly used when a creditor requires additional security beyond the principal debtor's own covenant. This document becomes particularly important in situations where companies seek financing but need additional support from their directors or shareholders, or where small businesses require external funding. The agreement must comply with Malaysian law, particularly the Contracts Act 1950 and Stamp Act 1949, and typically includes detailed provisions on the scope of the guarantee, enforcement mechanisms, and the rights and obligations of all parties involved. The document is essential in risk mitigation strategies for lenders and is often required as a condition precedent for various types of financing arrangements in the Malaysian market.
