Authorization procedure for sureties endorsements and guarantees

The purpose of this study is to set out the system and procedure for authorization of sureties endorsements and guarantees in public limited companies and the prospects for its future development. It covers the exceptions to the banking monopoly (1) the law applicable to the authorization procedure (2) the scope of the authorization required under article L 225-35 of the French Commercial Code (3) the guarantees subject to authorization and their classification (4) the procedures for granting authorization (5) then the procedure and conditions for granting Board authorization (6) and finally the sanctions applicable in the absence of authorization (7). In addition the possibility of determining the amount of the guarantee by reference to the amount of the underlying commitment guaranteed the guarantee ceiling and/or any liability limitation clause stipulated therein will be discussed (8). Lastly the cases in which a clause limiting or eluting liability may be disregarded will be recalled as will the possible impact of such disregard on the validity of the authorization granted (9).