Kaagazaat

Corporate Guarantee by a Parent Company

At a glance

Price: Free, always.
Stamp duty: A deed of guarantee is an instrument and stamp duty may be payable on it under the Indian Stamp Act, 1899 as it applies in Punjab and in Chandigarh.
Registration: Not required, in Punjab or in Chandigarh.
Witnesses: Not required by law.

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Free, always.

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Also called

Parent Company Guarantee
Holding Company Guarantee for Lease
Corporate Guarantee for Rent
Guarantee of Tenant Obligations
Group Company Guarantee for Commercial Lease
Deed of Guarantee for Lessee
Surety by Company for Tenant
Company Guarantee Letter

When you need it

When the tenant of a commercial property is a new company, a single-purpose subsidiary or a franchisee of a larger group, a landlord often wants more than the tenant's own promise to pay. A parent or group company can give that comfort by signing a guarantee: if the tenant does not pay the rent, the common area maintenance charges or any other sum under the lease, or does not meet its other obligations, the parent pays or performs instead.

This document is that guarantee. The parent company promises the landlord directly. The promise is on first written demand, without the landlord having to sue the tenant first. It continues through variations of the lease, extra time given to the tenant and the tenant's insolvency, and it says whether it also covers a renewal. It can be limited to a stated amount or left without a limit, it keeps the parent from competing with the landlord for the tenant's assets until the landlord is paid, and its benefit passes to a buyer of the tenanted property. A company can give a guarantee only if its own constitution and the Companies Act, 2013 allow it, and the document records the board approval and asks the company to confirm its power. Do that homework first and keep the resolution. Not for a bank guarantee that stands in place of a cash deposit (Security Deposit Bank Guarantee Format), not for a personal guarantee from a director or the proprietor, and not for a residential tenancy.

Whether you can fill this in here

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You can fill this one in on this site, and read the whole draft on screen before you decide anything about it. It is a carefully drafted template; it is not advice about your own facts.

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See stamp duty, registration and witnesses

What follows is written for Punjab and Chandigarh. It states the position there rather than describing how it varies, so the amounts below are the ones that apply — worth confirming at the sub-registrar’s office, because rates change. If the property is anywhere else in India, none of this is yours.

Stamp duty

A deed of guarantee is an instrument and stamp duty may be payable on it under the Indian Stamp Act, 1899 as it applies in Punjab and in Chandigarh. The duty is not printed in this document because the figure and the article that applies could not be verified. Have the Guarantor's advocate or the Collector of Stamps confirm it before signing, and buy the stamp paper in the name of the Guarantor or the Lessor as the Collector's office directs.

Registration

Not required, in Punjab or in Chandigarh. The guarantee does not create or transfer a right in immovable property. It is a promise to pay money and perform obligations, and the Lease it refers to has its own registration position.

Notarisation

Not required. Many landlords ask for the Guarantor's signatures to be notarised, with a certified copy of the board resolution and the Guarantor's incorporation papers attached; that is a precaution and not a legal condition.

Witnesses

Not required by law. Two witnesses are recommended and the signature page has room for them.

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Sample preview — placeholder answers, not your data

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CORPORATE GUARANTEE

This Guarantee is made at Chandigarh on 1 April 2026.

Meridian Retail Holdings Limited, a company incorporated under the Companies Act, 2013 (CIN U51909CH2015PLC036123), having its registered office at SCO 100, Sector 17-C, Chandigarh 160017, acting through Amandeep Singh, Director (the "Guarantor");

IN FAVOUR OF

Harpreet Singh Gill, of House 14, Sector 8, Chandigarh (the "Lessor").

RECITALS

A. By Lease Deed dated 4 April 2022 (the "Lease"), the Lessor has let Ground-floor showroom at SCO 42, Sector 34-A, Chandigarh 160022 (the "Premises") to Northline Retail Private Limited, of SCO 42, Sector 34-A, Chandigarh 160022 (the "Lessee"). The present term of the Lease ends on 3 April 2026.

B. The Guarantor is the holding company of the Lessee and benefits from the Lessee's use of the Premises. The Lessor was willing to let the Premises to the Lessee only if the Guarantor gave this Guarantee.

C. The board of directors of the Guarantor approved the giving of this Guarantee by a resolution passed on 2 April 2026.

THE GUARANTOR THEREFORE GIVES THIS GUARANTEE TO THE LESSOR AS FOLLOWS.

1. THE GUARANTEE

1.1 The Guarantor irrevocably and unconditionally guarantees to the Lessor the payment and performance of all rent, common area maintenance charges, interest and other sums the Lessee must pay under the Lease, and the due performance of all its other obligations under the Lease (the "Guaranteed Obligations").

1.2 The Guarantor's liability is the same as the Lessee's and is that of a principal debtor, not merely of a surety. It does not depend on the Lessor first claiming from the Lessee, suing the Lessee, or applying any deposit or other security it holds, although the Lessor may do any of these.

1.3 The Guarantor's total liability under this Guarantee for sums of money shall not exceed ₹22,20,000 (Rupees Twenty Two Lakh Twenty Thousand only), plus the Lessor's reasonable costs of enforcing this Guarantee.

2. DEMAND AND PAYMENT

2.1 If the Lessee fails to pay any sum or to perform any obligation that is a Guaranteed Obligation, the Lessor may give the Guarantor a written demand saying what is owed or what has not been done. The Guarantor shall pay the sum within 10 days of receiving the demand, or perform the obligation or pay the Lessor's reasonable cost of having it performed.

2.2 The Guarantor shall pay without deduction, set-off or counterclaim, and shall not delay payment because the Lessee disputes the demand. Any dispute between the Guarantor and the Lessee is for them to settle between themselves.

3. A CONTINUING GUARANTEE

3.1 This is a continuing guarantee. It is not discharged or reduced by any change to the Lease, any extra time or indulgence the Lessor gives the Lessee, any release of other security, or any change in the constitution, insolvency, winding up or reorganisation of the Lessee. The Guarantor agrees to these in advance and waives any rule of law that would discharge a guarantor because the Lease was changed without its consent.

Questions about this document

Does the Corporate Guarantee by a Parent Company need stamp paper or stamp duty in Punjab and Chandigarh?

A deed of guarantee is an instrument and stamp duty may be payable on it under the Indian Stamp Act, 1899 as it applies in Punjab and in Chandigarh.

See the full position on stamp duty, registration and witnesses

Does the Corporate Guarantee by a Parent Company need registration in Punjab and Chandigarh?

Not required, in Punjab or in Chandigarh.

See the full position on stamp duty, registration and witnesses

What does the Corporate Guarantee by a Parent Company cost on Kaagazaat?

Free, always.

Does the Corporate Guarantee by a Parent Company need witnesses?

Not required by law.

See the full position on stamp duty, registration and witnesses

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