Parent(al) guarantee meaning

This checklist sets out the key issues to consider when reviewing a PCG on behalf of a contractor who is being asked to provide a PCG. The terms 'contractor' and 'employer' are used, but the same principles also extend to arrangements between a contractor and a sub-contractor, or between an employer/contractor and a consultant. As PCGs are commonly bespoke, the particular context should be taken into account when assessing a PCG. For a fuller discussion of these points, see Practice Note: Parent company guarantees (PCGs) in construction—drafting and negotiation issues. Is the contractor obliged under the Building Contract to provide a PCG? If not, there is no requirement for the contractor to deliver one. Nevertheless, a contractor might still agree to give a PCG to reassure the employer and to create or sustain a good working relationship. Do the contractor’s internal policies allow the issue of PCGs, and is any approval necessary? Many businesses would opt to give a PCG rather than a performance bond,...

Legal issues This checklist sets out the main terms and matters to bear in mind when preparing and negotiating indemnity provisions in commercial (business-to-business) contracts. For model wording with drafting notes, see Precedent: Indemnity clause-commercial contracts. For more on indemnities, consult the following Practice Notes: Indemnities in commercial contracts Guarantees and indemnities-general contract For a practical guide to reviewing an indemnity clause in B2B agreements, see Practice Note: How to review an indemnity clause. General comments What to watch out for Is an indemnity appropriate? An indemnity is a contractual promise by one party to reimburse the other for specified loss or damage or, in some instances, to relieve them from liability. Unlike a guarantee, it imposes a primary obligation that may not rely on a third party’s default. Assess if an indemnity is the right mechanism or whether a guarantee is preferable, for example where a parent company guarantees a subsidiary’s obligations. If advising the indemnifier, consider...

Introduction When contracting in a business-to-business setting, aim to secure as much contractual protection as your negotiating position allows. This checklist explains how key clauses can control risk and safeguard businesses-whether you are a supplier or a customer-and how to negotiate them to extract the greatest benefit... Key provisions General comments Payment Payment security Confirm the financial stability of the party you are buying from or selling to by carrying out a credit check. Decide if a payment safeguard is needed, for example: a parent company guarantee a letter of credit or a bank performance bond Customer Will the customer be able to honour its payment commitments? Consider obtaining credit insurance, and continue to run credit checks throughout the life of the contract to manage overall exposure to financial risk... Supplier Is the supplier financially capable of meeting your supply demands... Payment terms...

A substantial penalty, imposed on TikTok on 2 May 2025 by Ireland’s privacy regulator, has sparked serious and widespread doubts over whether any firm exporting personal data to China can do so lawfully under EU data‑protection rules. ByteDance, TikTok’s parent, was hit with a €530m (around $600m) fine after the Irish Data Protection Commission (DPC) found it had failed to ‘verify, guarantee and demonstrate’ that EU users’ data—remotely accessed by staff in China—enjoyed safeguards ‘essentially equivalent to that guaranteed within the EU’. Concern over data flows to China has further intensified. The US government has now explicitly barred the movement of bulk sensitive personal data or government-related information between US persons and ‘countries of concern’—notably China. ‘The screw is turning on restricting the flow of data to China, under the banner of privacy, national security and competitiveness interests’, Joe Jones, director of research and insights at the International Association of Privacy Professionals, said in an emailed statement. Under the EU GDPR, data may only be sent beyond the EU where...

Re Madagascar Oil Ltd [2025] EWHC 1015 (Ch) What are the practical implications of this case? This judgment marks the first reported approval of an English restructuring plan that splits two creditors into separate classes, establishing a benchmark for using the fewest possible classes to ring-fence objecting creditors. Businesses can be more confident about placing creditors into tailored classes even where they would share the same insolvency ranking, provided the plan delivers materially different outcomes for them. The ruling endorses recognition of divergent creditor interests where it is not feasible for those creditors to confer with a view to their common interest... What was the background? Madagascar Oil Ltd (MOL) is a Mauritian-incorporated company with its head office in the UK. It forms part of a group that includes its operating subsidiary, Madagascar Oil SA (MOSA), and its parent, BMK Resources Ltd (BMK). The group holds exclusive rights to develop a technically challenging oilfield in Madagascar; however, production is currently suspended and the group is in...

In this issue Court of Protection UK taxation for private clients Updates to HMRC Manuals Tax avoidance, evasion and non-compliance Budgets and Finance Bills Private client insolvency Digital and crypto assets Charity and philanthropy Disputed trusts and estates Pensions, insurance and tax‑efficient investments International Further Private Client updates this week Question of the week News alerts—daily and weekly LexTalk® Private Client: a Lexis+® community New and updated content Dates for your diary Trackers Latest Q&As Useful information Court of Protection Court rules that an anonymity application under CPR 39.2(4) and section 6 of the Human Rights Act 1998 must proceed on a statutory basis (PMC (a child by his mother and litigation friend FLR) v Local Health Board) The claimant, a boy born in 2012, pursued a clinical negligence action against an NHS trust for injuries at birth. The claim, issued in March...

Dobbies Garden Centres Limited sought a Part 26A restructuring plan at a convening hearing in October 2024 and a sanction hearing in December 2024 before the Scottish Outer House, Court of Session. The key headline points are set out below (capitalised terms not defined here have the meanings given in the sanction judgment). This Deal Debrief forms part of our Restructuring plans collection. For an in‑depth analysis of key metrics from RPs filed in England & Wales in 2023, together with commentary from leading figures in the restructuring sphere, see Practice Note: Market Insights Trend Report—trends in Part 26A restructuring plans in 2023 [Archived]. Name of plan company Dobbies Garden Centres Limited (the Company) Industry sector Garden centres Place of debtor’s incorporation and jurisdictional factors The Company was incorporated in Scotland and its centre of main interests (COMI) was in Scotland. Legal counsel involved The Company: Almira Delibegovic-Broome KC and Elisabeth Roxburgh (instructed by Burness Paull LLP and Macfarlanes LLP) Timeline...

What is an agreement on liabilities? Parties to a deal may choose to set out, expressly, how known or potential remediation expenses under Pt IIA of the Environmental Protection Act 1990 (EPA 1990) will be shared, for example on a land transfer. An agreement on liabilities exists where: two or more persons are “appropriate persons” who bear all or part of the cost of a remediation measure they agree, or have previously agreed, the basis on which that burden is to be apportioned a copy of the agreement is supplied to the enforcing authority, and none of the parties notifies the enforcing authority that it contests the agreement’s application An “appropriate person” is the: person(s) who caused, or knowingly permitted, the contaminating substances to be in, on or under the relevant land (Class A), or owner or occupier of the contaminated land, but only where a Class A person cannot be identified (Class B) ...

Where a company produces annual accounts for a financial year, an audit is required unless an audit exemption applies. Qualifying subsidiary exemption from the requirement to audit accounts A subsidiary that meets specific criteria may claim an exemption from auditing its individual accounts for a given financial year. The necessary conditions are: it is a subsidiary undertaking its parent undertaking is constituted under the law of any part of the United Kingdom every member consents to the exemption for the financial year concerned its parent undertaking provides a guarantee for that financial year under section 479C of the Companies Act 2006, namely a statement guaranteeing all of the subsidiary’s outstanding liabilities at the end of the financial year until they are settled in full, which is enforceable against the parent by any person to whom the subsidiary is liable in respect of those liabilities it is included in the consolidated accounts prepared by the parent for that financial year, or to...

This Agreement, dated [ • ] 20[ • ], is entered into between the following parties: Parties [ insert name of Borrower ], a company incorporated in England and Wales with registered number [ insert company number ], whose registered office is at [ insert address ] (the Borrower); and [ insert name of Lender ] of [ insert address ] (the Lender). Background (A) [ insert description of background to transaction ]. (B) The Lender has agreed to provide the Facility (as defined below) to the Borrower on the terms and conditions contained in this Agreement...

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This Guarantee is entered into on the [ insert number ] day of [ insert month ] 20[ insert year ] by the parties set out below. Parties [ insert name ] (Company No. [ insert number ]) of/whose registered office is at [ insert address ] (the ‘Guarantor’); and [ insert name ] (Company No. [ insert number ]) of/whose registered office is at [ insert address ] (together with its successors and assigns, the ‘Employer’). Background Under a contract dated [ insert date ] (‘the Contract’) made between (1) the Employer and (2) [ insert name ] (‘the Contractor’), the Contractor has undertaken to carry out and complete certain works (‘the Works’) in accordance with the terms and conditions set out in the Contract. Pursuant to the Contract, the Contractor has undertaken to secure the provision of a guarantee in the form of this document (the ‘Guarantee’). The Contractor is a wholly owned subsidiary of the...