Certificate of Incumbency: Purpose and What to Include
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What is a Certificate of Incumbency?
A certificate of incumbency is an official document used by a Limited Liability Company (LLC) or corporation to certify who the directors, officers, and shareholders are of a company. They typically include an incumbency certificate and register of directors within them.
Purpose of a Certificate of Incumbency
The purpose of a certificate of incumbency is to confirm who the signing officers of a company or corporation are. In a nutshell, they operate to designate who has the legal authority to make decisions on behalf of a Limited Liability Company (LLC) or corporation.
Making Business Deals
When entities want to do business with your company, it’s important for them to know which individuals in your company have the authority to sign agreements with them. This ensures that when they enter a commitment with you, the individual who signs their agreement has the authority to do so.
If an individual who does not have the authority to sign an agreement enters a contract with another entity, it makes the contract null and void. This means that no matter what agreements were made within the contract, it is not legally enforceable.
Opening Business Banking Accounts
Another major business operation that a certificate of incumbency is required for is opening financial accounts. If you want to establish a business banking or checking account, the bank is going to want to know who your authorized agents are. In addition to any legal documents that establish your business under state laws, certificates of incumbency are usually a minimum requirement to open new accounts.
This helps banks to be sure that whoever is opening the business account has the authority to do so. It all goes back to the legal implications of business dealings – entities can only work with authorized representatives of companies or risk getting into serious legal trouble otherwise.
Working with Corporate Lawyers
Certificates of incumbency can also establish who the registered agent affiliated with the company is. That means that you can give delegate the rights to enter into agreements to a third party, which is helpful from a business perspective if you choose to work with corporate lawyers who make decisions on your behalf.
Certificates of incumbency also help lawyers determine to who they can release vital legal information about the company to.
Even if you don’t intend to delegate daily tasks to a lawyer, a certificate of incumbency is still needed. If you need a lawyer for assistance with any legal-related matters, your representative will need to know who the big names in the company are and who’s authorized to have access to critical legal information.
Check out this article to learn more about the purpose of a certificate of incumbency.
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What’s Included in a Certificate of Incumbency?
Successful certificates of incumbency are all-inclusive of all members of the company who can enter into agreements with other entities on the company’s behalf. They also include details about how the members within were brought on with the company, either elected or appointed, and how long they have the rights to sign on behalf of the company.
Here is a rundown of the members that a certificate of incumbency should include:
- President
- CEO
- Secretary
- Treasurer
- Shareholders
- Officers
- Registered agents
In addition to this basic information, certificates of incumbency should also include signatures for each authorized officer. This is helpful for providing a sample signature and protects against any non-authorized parties creating forged signatures to enter illegal business deals on the company’s behalf.
Ensuring that each member of the company who is an authorized signer is included in your certificate of incumbency is vital to your business operations. This can help you avoid legal roadblocks that could prevent you from making essential business agreements for your company.
If you need help crafting a certificate of incumbency, the best thing you can do is hire a lawyer. Their expertise in the area can help you navigate the process with ease.
Here is an article about what’s included in a certificate of incumbency.
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How to Get a Certificate of Incumbency
Obtaining a certificate of incumbency is easier than you might think.
Here are two simple steps that you can follow to get a certificate of incumbency for your business:
Step One: Draft the Certificate
The first step to obtaining a certificate of incumbency is easy: draft the document. This process is usually completed by a company’s secretary and is the most vital part of the process. It can be helpful to draft a comprehensive list of all the company’s authorized signers to make this process as easy as possible.
Some states require that the document be notarized by a public notary, but this is not always required. Be sure to check the laws in your state to find out whether this is a requirement for you.
Once this document is created and notarized (if required), then it is filed with the State Secretary Office in the state that the company is headquartered in.
Certificates of incumbency should always include the company’s seal. This solidifies it as a valid legal document and is essential to the legality of the document as a whole.
Step Two: Create and File Minute Book
A minute book is a company file that includes a copy of all essential legal documents related to the business. Since the certificate of incumbency delegates who can enter legal agreements, it makes sense that it should be filed here.
Minute books are essential to company operations because they store vital paperwork all in one place. In the event of a legal dispute, having access to all legal documents in one easy-to-find place makes the process a lot simpler.
In addition to a certificate of incumbency, minute books also include these important documents:
Learn more about how to obtain a certificate of incumbency by checking out this article.
Who Signs a Certificate of Incumbency?
A successful certificate of incumbency is comprehensive of all representatives of a company who can enter into legal agreements on the business's behalf. In order to certify that the certificate is valid, signatures are needed. Typically, the following parties must sign the certificate to make it legally valid:
- President
- CEO
- Secretary
- Treasurer
- Shareholders
- Officers
- Registered agents
Once all authorized parties have signed and printed their names, the company’s secretary signs the bottom to seal the deal. Once the certificate is signed and filed, any changes made can be completed using an addendum or by creating a new certificate of incumbency, which makes the previous version invalid.
Do you need to create a certificate of incumbency, but you’re not sure where to start? You need the help of experienced corporate lawyers to get the job done right. Post a project on ContractsCounsel today to get connected with corporate lawyers who specialize in certificates of incumbency today.
ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.
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Berkson is a dedicated, practical, and detail-oriented attorney licensed to practice in every state court of Oklahoma and the United States Northern and Eastern District Courts. He graduated from the University of Tulsa College of Law with Honors. While there, he received awards for highest grade in trial practice, legal research, and civil procedure. He was also the Executive Notes and Comments Editor for the Energy Law Journal, the official journal of the Energy Bar Association in Washington, D.C. The Energy Law Journal is one of the few peer-reviewed journals in the legal profession. Prior to becoming an attorney, Howard Berkson held executive positions involving a wide range of business and human resources management functions. He has in-depth knowledge of both business and HR practices. During his business career, Berkson negotiated, wrote, red-lined, and disputed contracts. He has answered charges, handled inspections, and supervised audits involving numerous agencies including the Department of Labor, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, and various state agencies. Berkson honed his analytical and writing skills while earning his Bachelor of Arts degree in Philosophy from the University of Washington. He went on to obtain a Master of Arts in Labor and Industrial Relations from the University of Illinois. Berkson’s work can be found in such publications as The Energy Law Journal, Human Resource Management Review and Personnel Psychology. He is a member of Phi Alpha Delta law fraternity and of Phi Kappa Phi honor society.
"Very easy and effective to work with. Howard knows what he is doing."
Gill D.
Erik has been a practicing attorney in Florida for over a decade. He specializes in employment and real estate contracts. He has represented clients big and small and can assist with any contract issue.
"Gill was incredibly responsive and professional throughout the entire process. He provided clear, practical legal guidance and handled a difficult, uncooperative counterparty with great patience. Highly recommend his services."
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Travis counsels individuals and businesses on a broad range of complex topics. His practice centers on producing efficient, client-driven results. He concentrates his practice on real estate, construction, and general business matters with an emphasis on assisting clients both before and after problems occur by drafting contracts designed to best position clients to avoid disputes and litigating matters to a final resolution if problems emerge. Born and raised in Oklahoma, Travis is a triple graduate of the University of Oklahoma, having obtained his Bachelor of Arts, Master of Business Administration, and Juris Doctor degrees from OU. Prior to practicing law, Travis managed the finances and business operations of a successful construction supply company for several years. This insight into sophisticated business dealings, contractual issues, and strategic planning makes him uniquely qualified to handle a wide range of legal matters. Travis lives in Norman with his wife, Haley, dogs, Walter and Poppy, and cat, Ernest. Outside of the office, Travis enjoys playing golf and reading.
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Justin Camper is a small business and trademark attorney, entrepreneur, public speaker, and writer. Justin has been practicing law close to 5 years and has done various areas of law from criminal work as a Prosecutor, to business and civil litigation at private law firms.
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Bolaji O.
Bolaji O. Okunnu is an entertainment lawyer and founder of the Okunnu Law Group, PLLC based in New York, New York. His practice includes work in the area of copyright, trademark, contract, intellectual property and business law. As an entertainment attorney, Bolaji represents a diverse roster of celebrities, record labels, music publishers, artists, bands, entrepreneurs, authors, songwriters, artist managers, record producers and entertainment executives concerning their intellectual property, business affairs and creative assets. He is an expert at solving complex and sophisticated legal and business issues relating to contracts, copyrights and trademarks. With his background in both the law and the music business, he brings a broad perspective to problem-solving and business plan strategies. He also has an extraordinary ability to speak to the hearts of creatives while helping them discover their voice and clarify their creative dreams and assignments.
Matt M.
I love to learn, and I love solving problems. That's why I became a lawyer, and learned to solve legal problems for individuals and businesses and help them fix things when there's a snag. Touch base if you think I could have something to offer for you or your company. Experienced, results-oriented legal professional whose background and education have established him as a valuable resource in areas of corporate law, franchising, litigation, compliance, mortgages and banking, and more. Practice Areas Include: Corporate law, Franchising, Litigation, real estate, corporate law, civil disputes, insurance representation, corporate counseling, dispute resolution, risk management, regulatory counsel, compliance. Experience involves sophisticated as well as routine corporate structuring and transactions, simple and complex litigation, and written and oral advocacy such as depositions, mediated settlement conferences, trials, appeals, written pleadings and discovery, and case strategy and analysis. Experience managing and litigating disputes between parties and negotiating settlements across the spectrum of civil litigation, including probative discovery, successful motions practice, legal research and writing, appellate practice, and legal consultation to individuals and business entities. Further experience includes digesting and monitoring updates to the legal landscape to advise clients or departments and successfully adapt policies and procedures to assure compliance with applicable laws and regulations as well as to manage risk effectively. For those needing a skilled commercial or corporate lawyer, or for individuals whose rights need persuasive advocacy, I am a valuable resource. Representative work also has involved success on the appellate level, as in Baker Construction Company, Inc. v. City of Burlington and Hawthorne, LLC, North Carolina COA09-13.
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