Certificate of Incumbency: What Is It and Why Does It Need To Be Certified?


Running an organization involves lots of paperwork. There are a lot of varieties that must be filed with the state–some that will depend upon what your small business construction is, and some which can be optional but good to have.

Even after a few years of being on this planet of enterprise, you may still really feel overwhelmed by authorized terms and documents you never even knew existed. A Certificates of Incumbency is one in every of these important, but not essentially well-known, documents.

We’ll explain what this certificate is and why it needs to be certified.

Let’s get into what Certificates of Incumbency are all about and why they’re important.

Certificates of Incumbency Defined
A Certificate of Incumbency, sometimes additionally called an incumbency certificate, is a authorized document issued by a corporate entity–Limited Liability Firm (LLC) or an organization–that establishes who the directors, officers, and key stakeholders are.

It specifies who each particular person is and what position they hold.

This doc most commonly serves as validation for identifying who’s able to enter into legally binding agreements on behalf of the corporate, or in different words, who the corporate’s signatories are.

Commonly the directors, officers and shareholders who are identified within the Certificates embrace, however should not limited to:

The doc certifies the identities of who is permitted to sign official documents on behalf of the company, rendering them legally admissible.

Issuing a Certificates of Incumbency
An organization’s secretary will draft up a Certificates of Incumbency document and usually will embrace the corporate seal. It may be notarized by a public notary, however this is not necessarily required. It tends to differ from state to state, so make sure you know your native regulations (or at the very least hire a authorized knowledgeable who can guide you thru them!).

Since this is considered an official act of the company with the Secretary because the officer in command of records, the Certificates is an official corporate doc and third parties will settle for its validity.

In addition to the officers’ names and titles, the Certificates of Incumbency consists of whether or not they were elected or appointed, and how lengthy their term is. Oftentimes, the doc will embody every officer’s signature as well, in order to provide a sample for verification.

The language on the shape itself will not be too complicated and would usually read something like the next boilerplate:

“The undersigned, [Secretary’s Name], Secretary of [Company Name]. (hereafter the “Firm”), hereby attests that:

He/she is the elected and appearing Secretary of the Firm and is chargeable for issuing and maintaining the records, minutes, and seal of the Company.
Pursuant to the Firm bylaws (or Articles of Affiliation) the folks listed below hold the position set forth opposite their names with the Firm, the signature showing opposite each such officer’s name is their own true signature.
Pursuant to the Firm bylaws (or Articles of Association) adopted by the Board of Directors, the person’s listed are authorized to behave on behalf of the Firm to enter into legally binding and enforceable agreements and transactions.”
This would then be followed by a list of names, titles, signatures, the date, after which lastly the secretary’s signature at the end. It’s not essential to have any witnesses to the signing, because the secretary’s signature automatically validates the document. The data must be kept up-to-date as new members be a part of the corporate and old members leave.

The Certificates of Incumbency is then stored in the company’s Minute Book. A Minute Book is an important doc which incorporates copies of all key firm documents and records.

The contents of the Minute Book will range from firm to company, but the key documents to include here are:

Corporate Articles
Directors’ Resolutions
Shareholders’ Resolutions
Annual Reports
Shareholders’ Assembly Minutes
Directors’ Assembly Minutes
These are just some of the many official paperwork that you will need to arrange when starting up a company or LLC. Depending in your choice of business entity, your tax standing, and what state you might be operating in, there may be additional filings you aren’t aware of.