Running a business sometimes means navigating legally sensitive bureaucracy, and while it can be overwhelming and tiresome, carefully following through the process early can save you a lot of hassle down the line.
One of those important, but easy to overlook processes is obtaining a certificate of incumbency.
In this article, we’ll walk you through what a Certificate of Incumbency is, where to obtain one, and what purpose it serves in the business world.
Let’s get to it!
What Is A Certificate Of Incumbency?
A certificate of incumbency is a document that contains updated information on a company’s ownership, including the names and signatures of shareholders, directors, officers, and company secretaries. This document is usually used by lower level representatives of a company to perform legally sensitive activities.
The certificate can be issued by a third party (Lawyer or CPA) or the corporate secretary of the company.
What’s in a Certificate of Incumbency?
An incumbency certificate contains the following information:
- Company name
- Company’s date of incorporation
- Particulars of director (s)
- Shareholders details (name and signature)
- Registered company address
- The number of shares
- Share capital
- Company’s business address – this is required if it’s different from the registered address
- Name and signature of the company secretary
Certificates of incumbency should also have the signatures of authorized officers. This proves that the representative is authorized to sign, and prevents any non-authorized parties from forging signatures on behalf of the company.
The certificate should also include information on whether the company officers were appointed or elected, as well as how long they will hold their titles.
The incumbency certificate doesn’t have a specific format, but will usually contain the following snippet:
“The undersigned, [Secretary’s Name], Secretary of [Company Name]. (hereafter the “Company”), hereby attests that:
He/she is the elected and acting Secretary of the Company and is responsible for issuing and maintaining the records, minutes, and seal of the Company.
Pursuant to the Company bylaws (or Articles of Association), the people listed below hold the position set forth opposite their names with the Company, the signature appearing opposite each such officer’s name is their own true signature.”
This snippet will then be followed by the details listed above and the company secretary’s signature at the end. It’s important to always update the certificate when changes happen in the company.
We’ve included a sample incumbency certificate for your reference.
Purpose of Certificate of Incumbency
A certificate of incumbency confirms the identity of the company’s representatives, usually in three situations where it’s common for the company’s officers to work on behalf of the company.
Opening Bank Accounts
Most banks in Hong Kong will ask for a certificate of incumbency when a company officer is sent to open an account with them. This is part of due diligence to ensure that the person transacting with them is truly representing a company.
It’s also common for banks to request the incumbency certificate for major financial transactions.
When Seeking Legal Counsel
Company lawyers hold vital company information, so before they release the information to a representative, they have to confirm first if the person they’re working with is part of the company.
Lawyers will often also need a certificate when preparing contracts for companies. The certificate helps them determine who should be included in the contracts to make them legally binding.
For Overseas Deals
When making overseas deals, the company you work with will need to know the authorized individuals from your company that they can work with. This ensures that the transactions and deals will be legally binding.
An incumbency certificate might be needed when a company is applying for a visa for a legal representative or employee.
How Do I Get A Certificate Of Incumbency?
You can get a certificate of incumbency from your company secretary. The company secretary would then prepare and certify the document on request.
In some cases, you might need to have the certificate notarized. This means your certificate should be certified by a notary public. A notary public is a senior lawyer who has been in practice for 7 years or more.
For the certificate to be notarized, your company secretary should first prepare the document before taking it to a notary public.
Notarizing the certificate will cost more, so if it’s not a requirement, you can use the document as-is.
Where Can I Get A Certificate Of Incumbency?
If you don’t have a company secretary, you can seek the services of Corporate Service providers. Various service providers in Hong Kong can help you get an incumbency certificate.
Who Can Sign the Certificate of Incumbency?
A certificate of incumbency includes all company representatives that can enter into agreements on behalf of the company, meaning that all these representatives must sign the certificate to make it valid.
Common company representatives include:
- Registered agents
How Long Is a Certificate Of Incumbency Valid For?
A certificate of incumbency is valid for as long as there are no changes to the company details, but some institutions might ask for one that is not older than 3 or 6 months.
What Is The Difference Between An Incumbency Certificate And A Particulars Report?
A particulars report, like an incumbency certificate, contains company details such as shared capital, registered address, and director’s names.
The main difference between an incumbency certificate and a particulars report is that a company’s particulars report doesn’t show updated information on company officers and shareholders.
A particulars report costs HK$22 that you can get from the Companies Registry.
A certificate of incumbency is a legal document that allows lower level company representatives to represent a company when signing important documents, opening accounts, or entering into partnerships.
Without the certificate, it would be difficult for another party to verify that the person they are dealing with is authorized to sign on behalf of the company. Therefore, if you don’t have a company secretary, consider hiring one or hiring a service to help you get this important document.
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