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Question
If directors have given guarantee for some unsecured loan of the company and directors have to pay it, then directors for such loan are treated as _______________.
If directors have given guarantee for some unsecured loan of the company and directors have to pay it, then directors for such loan are treated as _______________.
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Solution
The correct option is A Unsecured creditors
Unsecured debt is a debt which is not backed up by an underlying asset or we can say it is unsecured. The creditors in this case are high risk takers as there is no guarantee whether the borrow will repay the amount or not. Hence, the directors in the given case will be treated as unsecured creditors.
Unsecured debt is a debt which is not backed up by an underlying asset or we can say it is unsecured. The creditors in this case are high risk takers as there is no guarantee whether the borrow will repay the amount or not. Hence, the directors in the given case will be treated as unsecured creditors.
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