How to Get Incumbency Certificate
An incumbency certificate is basically an official document which comprises of important information such as the names of board members, directors, company, and other primary members of the management. This document acts as a proof of the identities of the business owners and their position in the particular company. The aim of an incumbency certificate is to confirm a firm’s signing officers. This document decides which member has the sole right to take important decision for the company.
How Does an Incumbency Certificate Work and Why It Matters?
As mentioned before, an incumbency certificate offers recognition to the officers who hold managerial positions in the company. For instance, the incumbency certificate format contains all the details about the company’s Chief Executive Officer (CEO), secretary, president, treasurer, etc. Not only this but the certificate also has complete information of the other board members as well as corporate officers.
Other than the names of board members and other officers, this certificate also contains the job positions of each and every members. It will help in understanding some of the important details of a company like who is the CEO, what is their role, and whether they are appointed or elected, etc.
The names of people mentioned in the documents will form a team of members which will legally represent the company. Thus, these members are appointed in order to ensure legal compliance. In case there is any malpractice in the organizations, these members will be liable to answer to questions.
What is the Importance of an Incumbency Certificate?
The incumbency certificate plays a crucial role of a business. The following are the reasons that explain why it is so important:
- This document is important for those who take legal decisions for the company.
- The maintenance of corporate documents falls under the corporate secretary's purview. Additionally, he or she is required to issue this certificate while including all members' information.
- It mentions and specifies the names as well as positions of all the family members present in a company.
- This certificate is needed at the time of merger when the executive board’s restructuring is in progress.
- The bank or any other financial institution will ask for incumbency certificate in case company wants to open a new account or perform a new transaction.
- It will become easier for the company if it wants to perform any legal or financial transaction.
What Information is Present in an Incumbency Certificate?
If you are particular regarding which members are specified in an incumbency certificate, you will be able to take help from a legal counsellor. Having said that, most companies commonly mention the names of the following people in this document:
- Company CEO, Chief Operating Officer (COO), and Chief Financial Officer (CFO)
- Company President
- Company Secretary
- Directors
- Treasurer
- Shareholders
In a nutshell, people who are mentioned in this certificate are those who will be legally responsible for the company. These are those people who are present at the top of the hierarchy because they are the ones who take most important decisions regarding the growth of the firm.
Format of Incumbency Certificate
In general, the company secretary files the incumbency certificate. For additional security, this document will come up with the company seal. This certificate may need to be notarized in accordance with some local requirements. Given below are the detailed format of the incumbency certificate:
- The certificate starts with an overview of the company as well as the status of its registration. Not only this but it also comprises the date of issue, important information of the company along with the region where the company is located.
- Next, comes the names of individuals who will be representing the company legally, their positions in the company along with their signatures.
- At the end of the certificate, the details of the company and individuals who filed incumbency certificate, the person’s qualifications as well as the signatures will be added.
Example of Incumbency Certificate
The format of incumbency certificate may vary from company to company but a general certificate looks like this.
The undersigned, Assistant Secretary/ Secretary …....., a …......... company, hereby certified the following:
- He or she has been duly elected for the post of Secretary/ Assistant Secretary of the company and is charged with record maintenance, minutes, as well as the company’s seal.
- I further certify that the following individuals have been selected as the office members according to their respective names. The signatures given below are original and authentic.
NAME, TITLE, and SIGNATURE
…...... …...... …......
- That the individuals chosen for the aforementioned positions were given sufficient power to act on behalf of the corporation in accordance with the corporation's bylaws, as amended, and particular resolutions adopted by the organization's board of directors.
- That pursuant to the company’s By Laws, as mentioned, the undersigned has the right to execute this document on behalf of the company and that he or she has executed this certificate with the company seal at this …... day of …....
Signature
Name
Title
(Company Seal)
How to Get an Incumbency Certificate?
To avail an incumbency certificate, you need to follow the given steps:
- Firstly, you need to draft the certificate. Certain laws might need to notarize this document. Note that, this document can only be issued by the company secretary.
- Once you are done with the above mentioned step, you have to file this document with the State Secretary’s Office.
- Next, you need to create a minute book and file the certificate. A minute book is an official file of the company which has copies of all the legal documents of the company.
Conclusion
An incumbency certificate plays a crucial role regarding the legal status of a company because it helps in verifying the identification of company board members and helps in performing days to day legal activities of the firm. Limited liability partnership companies are required to issue this certificate to those individuals who have the right to take legal as well as financial decisions of the company.
FAQs on Incumbency Certificate
- What can I do with an incumbency certificate?
The incumbency certificate has proven to be helpful in different circumstances such as company mergers or acquisitions.
- Who signs the incumbency certificate?
The incumbency certificate has all the details of company members. These members are those who have right to take financial and legal decisions on behalf of the company such as CFO, CEO, COO, President, shareholders, secretary, etc.
- Who files the incumbency certificate?
In general, a company secretary is the one who files the incumbency certificate. He or she is responsible in maintaining the company records. A company secretary's additional responsibilities include legally obtaining the signatures of all members and attaching the company seal at the end of this document.
- How long is an incumbency certificate valid for?
An incumbency certificate does not have any validity period, but a company secretary should make all the required changes to the documents if needed. This helps in ensuring that all the information is updated.
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