Key Takeaways

  • A certificate of incumbency verifies the identities and authority of a company’s directors and officers, ensuring they can legally act on behalf of the business.
  • It is often requested by banks, attorneys, and foreign entities when confirming corporate authority for contracts, loans, or opening accounts abroad.
  • Alternate names include officer’s certificate, secretary’s certificate, and register of directors, though the purpose remains consistent across jurisdictions.
  • Common elements include officer names, titles, signatures, terms of office, the secretary’s attestation, and the company seal.
  • Certificates are especially important for cross-border transactions, and many require notarization or an apostille for international recognition.
  • While similar to a power of attorney, a certificate of incumbency affirms authority rather than granting new powers.
  • Preparing a certificate usually involves the corporate secretary or registered agent, often alongside a certificate of good standing.

What Is an Incumbency Certificate?

An incumbency certificate is an official document that identifies and authorizes certain people to agree to and execute legally binding agreements on behalf of a corporation.

The incumbency certificate may be requested by another party to confirm that the person has the right to enter a binding agreement with the corporation. It may also be used in this case as a way to confirm and guarantee the signer's identity.

The incumbency certificate can also be used to identify the current directors, officers, and possibly, shareholders of the company. The certificate states who holds which positions within the company.

The people listed on the incumbency certificate are typically the chief executive officer and the chief financial officer. The incumbency certificate of a company is typically available to the public upon request.

An incumbency certificate is most often issued by the corporate secretary, who is the person who keeps track of the corporation's documents and records. The document should include a corporate seal which signifies that this is an act of the company and that the document can be relied upon for authenticity.

Importance of a Certificate of Incumbency

The certificate of incumbency serves as a safeguard for businesses, financial institutions, and third parties engaging with a corporation. It helps prevent fraud by offering formal proof of who holds authority within a company. Without it, outside entities would have no independent way of verifying if a person claiming to represent a corporation is truly authorized to do so. This makes the certificate indispensable in high-value transactions, international dealings, and legal matters.

Alternate Terms for Incumbency Certificate

Certificate of incumbency, certificate of officers, officer's certificate, register of directors, and secretary's certificate are some alternative names.

The name of the document is dependent on local law and custom, but the use and content remain the same.

Legal Recognition Across Jurisdictions

Although names vary, the legal weight of a certificate of incumbency is recognized internationally. In civil law jurisdictions, it may also be called a “register of directors” or “officer’s certificate.” In common law systems, the term “certificate of incumbency” is more widely used. Regardless of terminology, its legal function is the same: to confirm who has authority to bind the company.

Elements Included on an Incumbency Certificate

  • Information regarding the identities of the company's directors and officers
  • The incumbent's name, position, whether he or she was elected or appointed, and his or her term of office
  • The incumbent's signature
  • Secretary's signature
  • Company seal or header
  • A signature sample for comparison

The incumbency certificate might read something like this:

"The undersigned [insert person's name], secretary of [insert business name] or "the company," certify that the people named below hold the position within the company stated next to their names. The Secretary also certifies that the signature next to each person's name is their true signature and that they are authorized to [insert powers or stipulation of the deal]."

After this text, there would be a list of the officer names, titles, and space for signatures. The Secretary must also sign the document.

Authentication and Validation

For added credibility, many certificates of incumbency are notarized or issued alongside a certificate of good standing. When the document is intended for international use, an apostille may be required to meet the standards of the Hague Convention. This ensures the certificate is accepted by foreign governments and institutions. Some companies also include specimen signatures of officers so banks and third parties can compare signatures when processing contracts or financial transactions.

Who Needs an Incumbency Certificate?

An incumbency certificate is often requested by a bank or other financial institution to confirm that the person who signs truly has the corporate authority to sign and is the person they say they are.

An attorney drafting an agreement or contract between companies may also require an incumbency certificate. The certificate helps that attorney to know who can legally bind the company in a contract.

Common Requesting Parties

Beyond banks and attorneys, the following entities may request a certificate of incumbency:

  • Investors – to confirm company officers before funding agreements.
  • Regulatory authorities – particularly in international business compliance checks.
  • Vendors and partners – when entering into binding commercial contracts.
  • Courts – in cases where verifying corporate authority is relevant to litigation or settlement.

Situations Where an Incumbency Certificate Is Necessary

  • When a business is incorporating and must identify its officers
  • When someone becomes a new officer within the company and needs official documentation
  • When someone becomes an administrative manager or secretary who is in charge of corporate documentation
  • When the authority of a certain officer must be confirmed in writing
  • When opening a foreign bank account
  • For tax purposes
  • For an individual who is doing company business in a foreign country

Risks of Not Having a Certificate

Failure to provide a certificate of incumbency when requested can delay or prevent important transactions. For example, a bank may refuse to open an account or release funds until corporate authority is verified. Similarly, international contracts may remain unenforceable without documentary evidence of officer authorization. In some cases, the absence of this certificate can raise red flags about the legitimacy of a company’s governance.

Power of Attorney vs. Incumbency Certificate

The incumbency certificate is similar to the power of attorney document. A power of attorney provides some power to an officer to represent a company in a foreign country and while doing business.

Key Differences in Legal Effect

While both documents deal with authority, they differ fundamentally:

  • Certificate of Incumbency – confirms existing authority of officers within a corporation.
  • Power of Attorney – actively grants specific powers to an individual, often for a limited purpose or duration.

In practice, institutions may request both documents when conducting due diligence. Together, they provide assurance that the right individuals both have authority and are empowered to act in a particular matter.

Power in a Foreign Country

A certificate of incumbency grants different rights and powers to a company's officer than a power of attorney and is extremely important when a company officer is doing business in a foreign country. A certificate of incumbency specifically outlines responsibilities for the officers that will conduct business abroad. It also proves that this is the will of the corporation versus in the interest of a particular employee.

An Apostille can be attached to a notarized incumbency certificate. This is helpful when working with countries outside the U.S. that are members of the Hague Convention.

For example, if the company wants to open an office in The Netherlands, the incumbency certificate lists the powers given to the company representative and the papers that he or she may issue and sign on behalf of the company. It also gives him or her the power to make withdrawals from the company's bank account. The incumbency certificate gives the employee specific powers, but not unlimited power.

Preparation of an Incumbency Certificate

An incumbency certificate is typically prepared by the company's registered agent and notarized. This is most common in the State of Delaware.

When preparing an incumbency certificate, the people listed on the certificate will be required to provide a passport photo or government issued ID.

A business is also often required to be in good standing in the state in which it is incorporated.

In Delaware, these are the fees you might expect for the preparation of an incumbency certificate:

  • Incumbency certificate and certificate of good standing: $180
  • Apostille attachment to an incumbency certificate: $60
  • Expedited processing of documents (24 hours): $100
  • Standard delivery outside the U.S.: $35

How to Obtain a Certificate of Incumbency

Most corporations obtain a certificate of incumbency through their corporate secretary, registered agent, or legal counsel. The process generally includes:

  1. Confirming the business is in good standing with the state of incorporation.
  2. Drafting the certificate with officer names, positions, and terms of office.
  3. Having the secretary or authorized agent sign and affix the corporate seal.
  4. Optional notarization and apostille certification for foreign use.

Many companies incorporate the certificate into their corporate minute book, ensuring it remains part of the permanent record and is updated whenever officers change.

Frequently Asked Questions

  1. How long is a certificate of incumbency valid?
    There is no universal expiration date, but most institutions require a certificate dated within the past six months to ensure accuracy.
  2. Can an LLC issue a certificate of incumbency?
    Yes. For LLCs, the certificate lists managers or managing members instead of corporate officers.
  3. Is notarization always required?
    Notarization is not always required, but it increases the credibility of the document. For international transactions, notarization plus an apostille may be mandatory.
  4. How does a certificate of incumbency differ from bylaws?
    Bylaws outline the company’s governance framework, while the certificate confirms current officers and their authority at a specific point in time.
  5. Who keeps the official copy of the certificate?
    The corporate secretary or registered agent typically retains the official version, but copies may be provided to banks, attorneys, or regulators as needed.

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