According to article 449 of the OHADA Law of 2014, suretyships, endorsements and guarantees, autonomous counter-guarantees and other guarantees subscribed by companies other than those operating duly accredited credit, microfinance, or deposit insurance institutions and for commitments made by third parties shall be subject to prior authorization of the board of directors.
The board of directors may, within the limit of a total amount that it sets, authorize the chief executive officer or general manager, as the case may be, to give suretyships, endorsements, guarantees, autonomous guarantees, or counter-guarantees for commitments contracted by third parties.
Such authorization may also set, per commitment, an amount beyond which the suretyship, endorsement, guarantee, autonomous guarantee, or counter-guarantee of the company cannot be granted.
Where an obligation exceeds either one of the amounts thus fixed, the authorization of the board of directors is required.
The duration of the authorizations provided for in the preceding paragraphs may not exceed one (1) year regardless of the term of secured, guaranteed, or endorsed commitments.
The chief executive officer or general manager, as the case may be, may delegate the powers vested to him under the preceding paragraphs.
Suretyships, endorsements and guarantees granted without authorization for commitments entered into by third parties shall be null.
Where suretyships, endorsements, guarantees, autonomous counter-guarantees, and other guarantees have been granted for a total amount that exceeds the limit set for the current period, the excess cannot be invoked against third parties who had no knowledge of it unless the amount of the commitment invoked exceeds, by itself, one of the limits set by the decision of the board of directors taken under the provisions of this article. In this case, suretyships, endorsements, guarantees, autonomous counter-guarantees, and other sureties shall be null.
Directors, general managers, deputy general managers as well as their spouses, ascendants or descendants, and other intermediaries, are prohibited from contracting any loans, in any form whatsoever, from the company. They shall not let the company grant overdraft facility to their current account or otherwise, or have the company provide guarantee or security for their commitments to third parties under penalty of the agreement being declared null.
This prohibition shall not apply to legal entities which are members of the board of directors. However, their permanent representative, when acting in an individual capacity, shall also be governed by the provisions of this Article.
When the company operates a bank or a financial institution, this prohibition shall not apply to ordinary transactions carried out under normal conditions.