Introducing the Incumbency Certificate for Secure Business Dealings
An incumbency certificate, sometimes referred to as a certificate of incumbency or a form of incumbency, is a formal document issued by a corporation or a limited liability company (LLC). It details the names of its currently serving directors, officers, and occasionally, key shareholders. This document specifically identifies individuals holding various positions within the organization, essentially verifying who has the authority to enter into legally binding transactions on behalf of the company. Internationally, it might also be known as a register of directors, certificate of officers, or secretary certificate.
Key Insights into Incumbency Certificates
- An incumbency certificate records the identities of a company’s current directors, officers, and sometimes key shareholders.
- Financial institutions commonly require an incumbency certificate when a company opens an account to verify that individuals claiming to be authorized signatories are genuinely authorized.
- Contracts for business transactions involving companies typically require an incumbency certificate to determine who can legally bind the company in agreements.
Essential Information Included in an Incumbency Certificate
Regardless of the terminology used, incumbency certificates essentially provide equivalent information. This includes comprehensive details about the company’s directors, officers, and key shareholders. This can encompass the incumbent’s name, position, status (elected or appointed), term of office, and often a signature sample for validation.
A typical incumbency certificate may look like this:
“The undersigned, X, Secretary of ABC Inc. (the ‘Company’), hereby certifies that the persons named below do hold the positions set forth opposite their respective names within the Company, that the appearing signatures next to each person’s name are verifiable, and that these are the true signatures of such individuals who are duly authorized to…”
Following this preamble, you’ll find a list of directors and officers, the date, and the secretary’s signature.
The Issuance of an Incumbency Certificate
Typically issued by the corporate secretary, an incumbency certificate often bears the corporate seal and may be notarized by a notary public. As the secretary is responsible for maintaining company records, the incumbency certificate becomes an official document of the company, thereby reassuring third parties of its accuracy.
Scenarios Requiring an Incumbency Certificate
Financial institutions may request an incumbency certificate when a company applies to open a bank account or engages in significant transactions. Attorneys and other parties may also request this certificate to verify the legality and position of a director or officer within the corporation. It’s frequently required to ensure that persons asserting themselves as authorized signatories are genuinely authorized.
Real-World Example of an Incumbency Certificate
CERTIFICATE OF INCUMBENCY
The undersigned, Secretary/Assistant Secretary of [_], a [] corporation (the “Corporation”), hereby certifies as follows:
- He/she is the duly elected, qualified and acting Secretary/Assistant Secretary of the Corporation, and is responsible for maintaining the Corporation’s records, minutes, and seal.
- According to the Corporation’s Bylaws, the named individuals hold the offices indicated below. The respective signatures listed are authentic.
NAME | SIGNATURE | TITLE
……………………|…………. ……….. |…………………. ……………………|…………. ……….. |………………….
- The undersigned confirms their authority to issue this certificate on behalf of the Corporation.
- Issued and sealed on the [], day of [, 20].
Signature: _________________________ (SEAL)
Title: ______________________________
Understanding the Form and Signing of Incumbency Certificates
The term “form of incumbency” is another label for “incumbency certificate.” This document encompasses essential information about a company’s directors and officers, and sometimes key shareholders. An incumbency certificate must be signed by the corporate secretary. If the secretary needs certification, another company officer may co-sign it. Genuine signatures of listed individuals, such as directors and key shareholders, are essential.
Comparing a Certificate of Incumbency with a Corporate Resolution
While a corporate resolution refers to a formal document issued by a company’s board, documenting decisions made on its behalf, an incumbency certificate is a specific form of corporate resolution. Not all corporate resolutions function as incumbency certificates.
Conclusion: Significance of Incumbency Certificates
An incumbency certificate is crucial for verifying who is lawfully permitted to represent a company in business transactions. As an official company act issued by the corporate secretary, it assures accuracy and trustworthiness in business dealings. This certification aids in securing and substantiating business transactions.
Related Terms: Corporate Resolution, Certificate of Officers, Company Secretary, Legal Authorization.
References
- Thomson Reuters Practical Law. “Incumbency Certificate”.
- Delaware Inc.com, via Harvard Business Services. “What Is a Certificate of Incumbency?”
- Cornell Law School, Legal Information Institute. “Corporate Resolution”.
