What Is Incumbency Certificate – Its Importance, Format and How To Get One
An incumbency certificate is an official document that contains crucial details, such as names of board members, company directors and other primary management members. It validates the identities of business owners and specifies positions held by each member. This document’s primary purpose is to confirm a firm’s signing officers. It decides who has the legal authority to make decisions on behalf of a company.
This blog is a detailed guide to an incumbency certificate, how it works, its importance, the information included in it, its format, how to get an incumbency certificate and much more. Read on to get all the details.
How Does an Incumbency Certificate Work?
An incumbency certificate provides official recognition to the managerial officers present in a company. For instance, the incumbency certificate format mentions details about a business’s CEO, president, secretary, treasurer, etc. This document also mentions details pertaining to other board members and corporate officers.
Aside from the names, this certificate also mentions the job positions of each member. It can help understand some crucial details about a company, such as who the CEO is, were they appointed or elected, what their primary role is, etc.
The individuals mentioned in the documents form the team of members legally representing the company. Subsequently, these members are appointed to ensure legal compliance. That said, if there is malpractice in the firm, these individuals will be the first to face questions.
What is the Importance of an Incumbency Certificate?
The certificate of incumbency form is an integral part of a business. Here’s why this document is extremely important:
- The document is necessary for all officials who take part in forming legal decisions for a company.
- It signifies the names and positions of all members present in an organisation.
- The corporate secretary is responsible for maintaining company records. Further, he/she has to issue this certificate, mentioning the details of all members.
- A bank or financial institution asks for this document if a company wants to open a new account or for a new transaction.
- This certificate is also required during a merger when the executive board’s restructuring is in order.
- It may also come in handy when a company wants to make any financial or legal transaction.
What Information is Included in an Incumbency Certificate?
If you are inquisitive about which members are mentioned in an incumbency certificate, you can take help from a legal counsellor. However, most companies mention the names of the following individuals in this document:
- President of the company
- Company CEO, COO and CFO
- Directors
- Company Secretary
- Treasurer
- Shareholders, in some cases
In simple terms, those who need to be in this certificate are the people who will legally represent a company. These individuals are generally at the top of the hierarchy, as they take part in the most crucial decisions pertaining to their firm.
Format of Incumbency Certificate
Typically, the company secretary files this certificate. For added security, this document bears the company seal. Some local laws might also want this certificate to be notarised. The content of the certificate follows this format:
- It starts with an introduction of the firm and its status of registration. It also mentions the date of issue, region and the relevant company’s information.
- After that comes the names of individuals who legally represent the firm, the position they hold and their signatures.
- It might also mention whether these members were elected or appointed.
- Towards the end, this document mentions details on the individual or firm who filed this certificate, his/her qualifications and signature.
Example of Incumbency Certificate
The certificate of incumbency sample format might differ from one company to another. However, a typical certificate looks like this:
The undersigned, Secretary/Assistant Secretary _______, a _______ corporation, hereby certified the following:
- He/she is duly elected for the position of Secretary/Assistant Secretary of the corporation and is charged with record maintenance, minutes and the corporation’s seal.
- I further certify that the following persons have been elected to the office set as per their respective names. The signatures below are authentic and original signatures of those individuals:
NAME, SIGNATURE and TITLE
_______ _________ ________
- That pursuant to the corporation’s By Laws, as amended, and specific resolutions undertaken by the organisation’s Board of Directors, the persons designated for the above-mentioned roles were provided with enough authority to act on behalf of the corporation.
- That pursuant to the corporation’s By Laws, as amended, the undersigned has authority to execute this document on behalf of the corporation, and that he/she has executed this certificate with the company seal at this _____ day of ____.
Signature: ____
Name: ____
Title: ____
[Company seal]
How to Get an Incumbency Certificate?
Obtaining an incumbency certificate is easy. You simply need to follow these steps:
- Step 1: Draft the certificate. Note that some laws might require this document to be notarised. Please note that only the corporate secretary can issue this certificate.
- Step 2: After this, file this document with the State Secretary’s Office.
- Step 3: Create a minute book and file the certificate there as well. A minute book is a company file that includes copies of all essential legal documents related to the organisation.
Final Word
An incumbency certificate is a crucial document pertaining to the legal status of an organisation. It helps verify the existence of company members and assists in the day-to-day performance of a company. Limited liability companies or corporations must issue this document to list the people in their organisation who have the authority to take financial and legal decisions.
FAQs
Ans: Minute books store vital company information in one single file. This can help you access all documents in case of a legal proceeding. A minute book contains crucial information about documents, such as corporate bylaws, annual reports, EIN filings and more.
Ans: A certificate of incumbency mentions details of all company members. These members are individuals who can enter legal agreements on behalf of the business. Thus, several parties have to sign this document to ensure its validity, such as the CEO, CFO, COO, president, shareholders and more.
Ans: This certificate can be of use during several circumstances. For example, your bank might ask for this document if you want to seek financial services. An incumbency certificate also comes to play during acquisitions or mergers.
Ans: Typically, a company secretary is responsible for drafting this document. He/she is accountable for maintaining corporate records within a company. Furthermore, a company secretary’s role is to get all members’ signatures through legal means and put the company seal at the end of this document.
Ans: There is usually no validity period for this certificate. However, a company secretary should make necessary changes in this document whenever a minute change occurs in the firm. This will help ensure that all information stays up-to-date.
Disclaimer
This article is solely for educational purposes. Navi doesn't take any responsibility for the information or claims made in the blog.
