- Liability determines who the issuer pursues if the balance is not paid.
- Joint and several liability means any one signatory can be pursued for the whole amount.
- Company failure does not extinguish a personal guarantee.
- The answer is in the agreement, not the marketing material.
- Corporate-liability programmes typically avoid individual exposure entirely.
The three liability models
Commercial cards use one of three arrangements, and the distinction only becomes visible under stress.
- Corporate liability — the entity alone is responsible; the issuer has no recourse to individuals.
- Joint liability — company and individual are both responsible, and the issuer may pursue either.
- Individual liability — the cardholder is responsible and reclaims from the company; less common in this category.
Joint and several liability
Where more than one person signs, liability is frequently joint and several. That means each signatory can be pursued for the entire balance, not a proportionate share — the issuer chooses whom to approach, and it will approach whoever is most likely to pay.
For co-founders this is worth discussing explicitly before signing rather than discovering afterwards.
What happens if the company fails
Under corporate liability, an unpaid balance is a claim against the company and is dealt with in the insolvency process. Under a personal guarantee, the guarantee survives and the individual remains liable.
This is precisely the scenario guarantees exist to cover, so expect them to be enforced rather than waived.
- Ask whether the guarantee survives dissolution, sale or change of control.
- Ask whether it is capped at an amount or open-ended.
- Ask what release conditions exist and whether release is automatic.
- Keep a copy of the signed agreement somewhere you can find it years later.
Where to find the answer
In most agreements the relevant terms sit under headings like “Your liability”, “Guarantee”, “Joint accounts” or “Default”. They are rarely summarised on the product page, and the application flow may reference them only by link.
If you cannot find an unambiguous statement, ask the issuer in writing and keep the reply. An unclear answer is itself informative.
Frequently asked questions
Terms can generally be amended under the contract, and a guarantee may be requested at a later stage in some circumstances. Read the amendment clause and keep the version you signed.
Usually not — an authorised user can spend but is typically not liable for the balance. That responsibility stays with the account holder and any guarantor.
By underwriting the company rather than an individual, using inputs such as cash position and spend behaviour. See how corporate card limits work.
Keep reading
Sources and further reading
Every factual statement on this page is checked against primary documentation. Terms change frequently, so confirm details with the provider before acting on them.
- Consumer Financial Protection Bureau — credit card resources Background on card terminology, billing cycles and consumer-vs-commercial distinctions.
- Mastercard — commercial payments Network-level background on commercial card programmes.
- Brex legal and platform agreements Issuer disclosures, program agreements and regulatory statements.