What Is A Certificate of Incumbency? And How To Get One.
If you own an LLC or corporation, you might have encountered the term “Certificate of Incumbency.” Maybe a bank or a lender requested this Certificate to secure a loan for your business.
What exactly is a Certificate of Incumbency? This article delves into Certificates of Incumbency, explaining what they are, why they are used, and how you can obtain one for your Delaware company.
What Is A Certificate of Incumbency?
A Certificate of Incumbency is an internal company document that provides details about the company’s leadership at a moment in time. Certificates of Incumbency are particularly useful for verifying authorized people within a company during processes like opening bank accounts or securing financing.
For corporations, the Certificate of Incumbency lists the current officers and directors, and may include shareholders as well. In the case of an LLC, it identifies the Members who own and control the company.
Typically, the company’s corporate Secretary or President signs the Certificate of Incumbency, and it can also undergo notarization. This notarization process ensures the document becomes part of the public record and can reinforce its authenticity and trustworthiness.
Why Are Certificates of Incumbency Needed?
Companies frequently undergo reorganizations or restructuring, changing their management teams over time. Lenders initially request organizational documents to identify the original leaders, however, they also need to know who currently holds these positions.
A Certificate of Incumbency provides updates on any changes in leadership since the company was formed. This ensures that lenders and other interested parties have accurate and updated information about who is authorized to make decisions on behalf of the company.
What Is A Certificate of Incumbency Used For?
A Certificate of Incumbency may be needed to complete certain business functions, such as:
- Opening business bank accounts,
- Obtaining financing from a lender,
- Selling company stock or assets, or
- Completing large business transactions.
A Certificate of Incumbency ensures that all parties involved in these activities can verify the identity and authority of the individuals conducting business on behalf of the company.
Does A Certificate of Incumbency Get Filed With The State?
No, Certificates of Incumbency do not usually require filing with the Secretary of State or any other government office. The Certificate is a private legal document prepared by an authorized officer of the company. However, a Certificate of Incumbency can be notarized to make it more official.
Can LLCs Get A Certificate of Incumbency?
Yes, limited liability companies (LLCs) can indeed issue Certificates of Incumbency. An LLC Manager or Officer is typically responsible for preparing this Certificate, which details the company’s Officers, Managers, and Members as of the current date. A Certificate of Incumbency for an LLC confirms who is involved in managing and controlling the LLC.
How To Get A Certificate of Incumbency For A Delaware Company.
Need a Certificate of Incumbency for your Delaware corporation or LLC? IncNow can help.
IncNow’s Delaware Incorporation Specialists can prepare Certificates of Incumbency to help your business secure financing, open bank accounts, or close large transactions.
To obtain a Certificate of Incumbency for a Delaware LLC or corporation, contact IncNow:
Call IncNow at 1-800-759-2248.
Email IncNow at agents@incnow.com.
Delaware Certificate of Incumbency vs. Delaware Certificate of Good Standing
A Delaware Certificate of Incumbency and Delaware Certificate of Good Standing are two types of corporate documents that businesses may require for securing financing or opening financial accounts. While they serve similar purposes, there are significant differences between them.
The Delaware Secretary of State’s office issues a Certificate of Good Standing. This Certificate verifies that a corporation or LLC:
- Is duly formed under the state’s incorporation laws,
- Has fulfilled all its legal obligations, such as submitting annual reports, and
- Has paid all necessary state taxes on time..
A Certificate of Incumbency is like a current directory of your company’s leadership. It names the individuals who have the authority to act on behalf of the company. A company officer actively prepares and signs this document.
Conversely, the Certificate of Good Standing serves as validation from the state that your business is compliant with applicable laws and regulations. It is a formal endorsement from the state.
Key Differences: Certificate of Incumbency vs. Certificate of Good Standing
A Certificate of Incumbency acts like a current directory of your company’s leadership. It specifically names the individuals who have the authority to act on behalf of the company. This document is prepared and signed by a company officer.
On the other hand, the Certificate of Good Standing is a formal endorsement from the state, serving as validation that your business complies with state laws and regulations.
The Certificate of Incumbency is crucial when you need to authenticate the identity and authority of the people managing your company’s affairs. This is typically required for opening new bank accounts or securing corporate financing.
Conversely, the Certificate of Good Standing is often necessary when your company seeks to register to do business in other states or needs to reaffirm its legitimacy and adherence to state laws for various business engagements.
In summary, while the Certificate of Incumbency verifies who currently holds decision-making power within the company, the Certificate of Good Standing assures that the company itself has maintained good legal standing with the state.
