According to article 506 of the OHADA Law of 2014, suretyships, endorsements and guarantees, counter-guarantees and other security interests granted to companies other than credit institutions, microfinance or guarantee insurance institutions, duly approved by the general director or the deputy general director shall be enforceable against the company only if they received prior authorization from the ordinary general meeting either as a general decision, or a special one.
Prohibited agreements
Under penalty of invalidity of the agreement, the general director or the deputy general director, when one was appointed, as well as their spouses, ascendants or descendants and intermediaries, are prohibited from contracting, in any form whatsoever, loans from the company, being granted an overdraft on a current account or otherwise, or to have the company provide guarantee or secure their commitments to third parties.
However, when the company is a banking or financial institution, it may grant its general director or its deputy general director, in any form whatsoever, a loan, an overdraft on a checking account or otherwise, an endorsement, a suretyship or other guarantee, if these agreements pertain to routine transactions carried out in the ordinary course of business.