Running a company includes a variety of paperwork. There are a lot of kinds that have to be filed with the state–some that may depend upon what your small business structure is, and a few which can be optional however good to have.
Even after a few years of being on the planet of business, you may still feel overwhelmed by legal terms and paperwork you never even knew existed. A Certificate of Incumbency is one among these vital, but not essentially well-known, documents.
We’ll explain what this certificate is and why it must 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 also called an incumbency certificates, is a legal doc issued by a corporate entity–Limited Liability Company (LLC) or an organization–that establishes who the directors, officers, and key stakeholders are.
It specifies who every particular person is and what position they hold.
This document most commonly serves as validation for identifying who is able to enter into legally binding agreements on behalf of the corporate, or in other words, who the company’s signatories are.
Commonly the directors, officers and shareholders who are identified within the Certificate include, but are not limited to:
President
CEO
Secretary
Treasurer
The document certifies the identities of who is authorized to sign official paperwork on behalf of the company, rendering them legally admissible.
Issuing a Certificate of Incumbency
A company’s secretary will draft up a Certificates of Incumbency document and normally will embrace the corporate seal. It can be notarized by a public notary, but this just isn’t essentially required. It tends to range from state to state, so make sure you know your native rules (or at the least hire a legal professional who can guide you through them!).
Since this is considered an official act of the company with the Secretary as the officer accountable for records, the Certificates is an official corporate doc and third parties will accept its legitimateity.
In addition to the officers’ names and titles, the Certificate of Incumbency contains whether or not they have been elected or appointed, and how long their time period is. Oftentimes, the doc will embody each officer’s signature as well, so as to provide a sample for verification.
The language on the shape itself is not too complex and would generally read something like the following 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 answerable 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 appearing 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 Company to enter into legally binding and enforceable agreements and transactions.”
This would then be adopted by a list of names, titles, signatures, the date, and then finally the secretary’s signature at the end. It’s not essential to have any witnesses to the signing, as the secretary’s signature automatically validates the document. The data must 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 crucial doc which contains copies of all key company documents and records.
The contents of the Minute Book will vary from firm to firm, but the key paperwork to incorporate listed below are:
Corporate Articles
Bylaws
Directors’ Resolutions
Shareholders’ Resolutions
Annual Reports
Shareholders’ Meeting Minutes
Directors’ Assembly Minutes
These are just some of the many official documents that you will need to organize when starting up a corporation or LLC. Relying on your alternative of enterprise entity, your tax status, and what state you are operating in, there may be additional filings you aren’t aware of.