Running a company involves lots of paperwork. There are a lot of varieties that have to be filed with the state–some that may depend upon what what you are promoting construction is, and a few that are optional however good to have.
Even after a couple of years of being on this planet of business, you may still really feel overwhelmed by authorized terms and documents you by no means even knew existed. A Certificate of Incumbency is considered one of these necessary, however 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 Certificates of Incumbency, typically also called an incumbency certificates, is a legal document issued by a corporate entity–Limited Liability Company (LLC) or a corporation–that establishes who the directors, officers, and key stakeholders are.
It specifies who each individual is and what position they hold.
This document 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 recognized in the Certificate embody, however are usually not limited to:
President
CEO
Secretary
Treasurer
The doc certifies the identities of who is permitted to sign official documents on behalf of the corporate, rendering them legally admissible.
Issuing a Certificate of Incumbency
An organization’s secretary will draft up a Certificate of Incumbency document and normally will embrace the corporate seal. It can be notarized by a public notary, however this shouldn’t be necessarily required. It tends to vary from state to state, so ensure you know your native regulations (or at the least hire a legal professional who can guide you through them!).
Since this is considered an official act of the corporate with the Secretary because the officer in command of records, the Certificate is an official corporate document and third parties will settle for its legitimateity.
In addition to the officers’ names and titles, the Certificate of Incumbency includes whether or not they were elected or appointed, and how long their term is. Oftentimes, the document will include each officer’s signature as well, in an effort to provide a sample for verification.
The language on the form itself shouldn’t be too complex and would generally read something like the next 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 Company and is answerable for issuing and maintaining the records, minutes, and seal of the Company.
Pursuant to the Firm bylaws (or Articles of Association) the individuals listed under hold the position set forth opposite their names with the Company, the signature showing opposite each 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 individual’s listed are approved to act 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, and then lastly the secretary’s signature on the end. It is not essential to have any witnesses to the signing, as the secretary’s signature automatically validates the document. The information must be kept up-to-date as new members be a part of the corporate and old members leave.
The Certificate of Incumbency is then stored within the company’s Minute Book. A Minute Book is an important document which incorporates copies of all key firm paperwork and records.
The contents of the Minute Book will differ from company to company, however the key paperwork to include listed below 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’ll want to arrange when starting up a company or LLC. Depending on your choice of business entity, your tax status, and what state you might be working in, there could also be additional filings you are not aware of.