Starting a business involves filing mountain-sized paperwork, with some being more or less difficult depending on your corporate lingo fluency, but if there’s one piece of document that you should prioritize, it’s the Certificate of Incumbency and the dynamics involved in running your Delaware company: you need it to enter contracts, open bank accounts, and work with corporate/government agencies.
What is the Certificate of Incumbency?
Certificate of Incumbency is an official document to verify the executives, directors, or shareholders in a company, mostly utilized by a Limited Liability Company (LLC) or corporation.
Other names of this certificate include officer’s certificate, register of directors, certificate of officers, or secretary’s certificate.
Note: When you make a new certificate of incumbency, the earlier one will be invalid.
When do you need to use the Certificate of Incumbency?
A Delaware Certificate of Incumbency serves to identify who has the power to legally decide on behalf of a business or LLC in 4 circumstances.
For business deal-making or signing any official documents
An agreement becomes invalid (null and void) when an unauthorized signing officer signs a contract with another party. That’s when a certificate of incumbency comes in handy to prove the authority of the signatory. This is especially important when you expand business across borders, or outside of Delaware.
Organizations wishing to work with your LLC need to know who in your organization is authorized to sign contracts with them before entering into partnerships.
A third party can rest assured about the legality and trustworthiness of this document because it contains the company seal and is preserved by the corporate secretary.
Opening bank accounts
Opening bank accounts for Delaware companies is a significant activity that needs this certificate. The bank or any other financial institution will inquire about your authorized agents if you wish to open a checking or business banking account.
Certificates of incumbency are a requirement to create new accounts, apart from other legal documents that establish your business under state laws. This is easier for the banks to verify that the person opening the business account is authorized.
For example, let’s say you are the President of the business, and you come to the bank for a transaction. You can show the bank this certificate with your name and (president) title cited on the document. This way, the bank knows that you are a legal representative.
Confirming the Minute Book is valid
The Minute Book records all the vital documents, such as annual reports, bylaws, shareholders’ or directors’ resolutions, and meetings. When there is a need to validate the signing officers in the Minute Book, the certificate of incumbency will come in handy (usually when the government agencies or auditors need to confirm the validity).
What information should be included in a Certificate Of Incumbency?
The first thing is a lead-in text of the secretary that introduces his/her name, on behalf of what company, and claims that the following signatures are true. You can see this Certificate of Incumbency LLC sample for more details.
After that, all company members with the authority to contract on the business’s behalf are presented. The document should include the names, titles, and blank space for signatures of the president, CEO, shareholders, officers, treasurer, and registered agents. Of course, the secretary must also sign the document.
The signatures of each authorized official act as references to compare in case unauthorized parties try to forge signatures. As such, it will ward off any shady business dealings on the company’s behalf.
At the end of the certificate is the company seal (as mentioned).
How to get a Certificate Of Incumbency?
To get a Certificate of Incumbency LLC, you can simplify this process with two main steps:
Prepare all the information to make a draft: You should draft a complete list of authorized people to speed up the process. Usually, the company secretary will handle this work.
Create and file the company’s minute book: This one should be filed because it confirms who has the authority to sign or enter an agreement.
Who signs a Certificate of Incumbency?
All parties with signing authority, usually a Secretary or a designated company officer, must sign and print their names. And the last step is sealing the contract when the company’s secretary signs at the bottom.
Delaware Certificate of Incumbency is related to business contracts, legal matters, and settling disputes in the future. That’s why you need to put more effort into getting it done when starting a company.
The advice for you is to seek an experienced consultant’s help to ensure the procedure’s completion. Or feel free to contact us at email@example.com for assistance.
Frequently Asked Questions
Does Delaware issue Certificate Of Incumbency?
Yes, Delaware can issue a Certificate of Incumbency, though you can do it on your own. Many Delaware companies prefer a third party to issue this certificate.
Is a Certificate Of Incumbency necessary?
Yes, it is. Especially if you want to open a business bank account as it will be easier for the banks to verify your identity and authority.
For entering partnerships or opening accounts, this is also necessary. Both you and the opposite party must confirm the identity (of the signer). This shows your partners that the person they are working with is an authorized representative.
Disclaimer: While BBCIncorp strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact BBCIncorp’s customer services for advice on your specific cases.
- What is the Certificate of Incumbency?
- When do you need to use the Certificate of Incumbency?
- What information should be included in a Certificate Of Incumbency?
- How to get a Certificate Of Incumbency?
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