Can a Public Limited company be a guarantor

Rohan Khandekar, MBA,CCA (Querist) 23 June 2011 This query is : Resolved
Dear Professionals

Kindly advise whether a Public Limited company be a guarantor for its employees who have taken loan from Bank.

Whether Directors of a company have such authority to create such liability of company.

Thanks

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Chanchal Nag Chowdhury (Expert) 24 June 2011
Yes,provided it is allowed by the Memorandum & Articles of the company.However, I am yet to come across any Co. which permits of such an eventuality.

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