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.
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.
The certificate of incumbency form is an integral part of a business. Here’s why this document is extremely important:
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:
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.
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:
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:
NAME, SIGNATURE and TITLE
_______ _________ ________
Obtaining an incumbency certificate is easy. You simply need to follow these steps:
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.
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: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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