If ever you, as a trustee, are required to sign surety to enable a trust owned company to raise a bond, guaranteed that it’s by First National Bank. They are clueless with regard to a shareholder’s responsibilities to a company.

So, if you get this demand from FNB, here’s what you do:

Respond that one of the trustees refused to sign on the grounds that it is an improper requirement to ask a shareholder to sign surety for a company.

In every instance where I have been involved, they have backed down. Most recently, by saying that since the trust deed does not give the trustees the power to sign surety, then they will withdraw their demand.

Absolute rubbish. It is a discretionary trust, so the trustees don’t need any additional authority to do anything as long as it’s for the benefit of beneficiaries.

If you find yourself in this position and they don’t back down, then go another bank. Do not EVER commit the trust as a surety for anything.