Incumbency certificate is an official document issued by a corporation or limited liability company (LLC) that lists the names of the company’s current directors, officers, and, in some cases, key shareholders.
It specifies who holds which positions within the organisation and is most commonly used to verify the identity of individuals who are authorised to enter into legally binding transactions on behalf of the company.
What Is an Incumbency Certificate, and How Do I Get One?
Important Point to Remember:
An incumbency certificate lists the current directors, officers, and, in some cases, key shareholders of a company.
A financial institution will frequently require an incumbency certificate when opening an account to ensure that the people claiming to be a company’s authorised signatory are actually authorised.
Contracts for business transactions typically require a certificate of incumbency to determine who has the legal authority to bind the company to the contract.
Understanding Certificates of Occupancy
A certificate of incumbency, a certificate of officers, an officer’s certificate, a register of directors, or a secretary’s certificate all essentially provide the same information.
The corporate secretary issues incumbency certificates, which often bear the corporate seal and may be notarized by a public notary.
The incumbency certificate is an official act of the company, and third parties can reasonably rely on its accuracy because the secretary is in charge of keeping company records.
An incumbency certificate contains all pertinent information about the company’s directors and officers, including the incumbent’s name, position, and term of office, whether elected or appointed.
A signature sample is usually included for comparison purposes.
The undersigned, X, Secretary of ABC Inc. (the “Company”), certifies that the persons listed below hold the positions listed opposite their names with the Company, that the signature appearing opposite each such person’s name is the true signature of that person, and that they are duly authorised to sign this document.
The secretary’s signature would be followed by a list of the directors and officers, the date, and a list of the directors and officers.
When a company applies for a bank account or initiates a major transaction, a financial institution may request this document.
An attorney or anyone else who wants to confirm the legality and stated position of a director or officer within the corporation could also request the certificate.
Anyone who is involved in a business transaction with a company and needs to verify an officer’s stated position can request an incumbency certificate from the company’s secretary.
In practise, a bank or other financial institution will often require an incumbency certificate when opening an account to ensure that the person claiming to be a company’s authorised signatory is actually one.
Similarly, when attorneys draught contracts for business transactions, they usually require an official incumbency certificate to determine who has the legal authority to bind the company to the contracts.
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