Running a company involves a whole lot of paperwork. There are numerous types that must be filed with the state–some that will rely upon what your corporation construction is, and some which are optional but good to have.
Even after a few years of being in the world of enterprise, you may still feel overwhelmed by authorized terms and documents you never even knew existed. A Certificates of Incumbency is one in all these important, however not essentially well-known, documents.
We’ll explain what this certificates is and why it needs to be certified.
Let’s get into what Certificates of Incumbency are all about and why they’re important.
Certificate of Incumbency Defined
A Certificate of Incumbency, sometimes also called an incumbency certificate, is a authorized document issued by a corporate entity–Limited Liability Firm (LLC) or a company–that establishes who the directors, officers, and key stakeholders are.
It specifies who each person is and what position they hold.
This doc most commonly serves as validation for figuring out who is 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 in the Certificates embody, but aren’t limited to:
President
CEO
Secretary
Treasurer
The doc certifies the identities of who is allowed 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 Certificate of Incumbency doc and usually will include the corporate seal. It may be notarized by a public notary, however this will not be essentially required. It tends to range from state to state, so ensure you know your native rules (or at the least hire a legal knowledgeable who can guide you thru them!).
Since this is considered an official act of the company with the Secretary because the officer in control of records, the Certificates is an official corporate doc and third parties will accept its validity.
In addition to the officers’ names and titles, the Certificates of Incumbency contains whether or not or not they have been elected or appointed, and the way long their time period is. Oftentimes, the doc will embody each officer’s signature as well, in an effort to provide a sample for verification.
The language on the form itself will not be too complex and would generally read something like the following boilerplate:
“The undersigned, [Secretary’s Name], Secretary of [Company Name]. (hereafter the “Company”), hereby attests that:
He/she is the elected and performing Secretary of the Firm and is liable for issuing and sustaining the records, minutes, and seal of the Company.
Pursuant to the Company bylaws (or Articles of Association) the individuals listed below hold the position set forth opposite their names with the Firm, the signature appearing opposite every such officer’s name is their own true signature.
Pursuant to the Firm bylaws (or Articles of Affiliation) adopted by the Board of Directors, the particular person’s listed are authorized to behave on behalf of the Company to enter into legally binding and enforceable agreements and transactions.”
This would then be followed by a list of names, titles, signatures, the date, and then 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 needs to be kept up-to-date as new members join the company and old members leave.
The Certificates of Incumbency is then stored in the company’s Minute Book. A Minute Book is a vital document which incorporates copies of all key company documents and records.
The contents of the Minute Book will vary from company to company, but the key documents to include listed here are:
Corporate Articles
Bylaws
Directors’ Resolutions
Shareholders’ Resolutions
Annual Reports
Shareholders’ Assembly Minutes
Directors’ Meeting Minutes
These are just a few of the many official documents that you will need to organize when starting up a company or LLC. Relying on your selection of business entity, your tax status, and what state you’re working in, there could also be additional filings you are not aware of.