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Certificate of Incumbency – What’s this document all about?

By June 3, 2015December 22nd, 2020Corporate

What is a Certificate of Incumbency?

This is a document that identifies and certifies who the directors and officers of a corporation are. This is often asked for if the shares of a corporation are being purchased. The parties want to be sure that the parties signing the documents have the legal authority to act on behalf of and ultimately bind their respective corporations.

Who prepares the Certificate of Incumbency?

The Secretary of the Corporation usually prepares the Certificate of Incumbency. The Secretary is a person who has been appointed by the board of directors to manage the corporate minute book and company records. The Minute Book is a binder full of documents related to the corporation. It includes, for example, the corporate seal, the articles of incorporation, the corporate by laws, various registries (e.g. director, shareholder, and officer registries), resolutions and meeting minutes of the directors and shareholders, share certificates, and annual reports.

What exactly is being certified?

The Secretary is certifying the identity of the directors and officers of the corporation.

How do you complete this document?

To complete the Certificate of Incumbency, the Secretary will need to identify:

  • Who they are (by inserting their name in the first and last clauses of the Certificate);
  • The name of the corporation;
  • The jurisdiction of the corporation (i.e. Alberta, Canada, Ontario, etc.);
  • Who the directors are; and
  • Who the officers are.

From here, each of the officers will then need to sign beside their respective names and office.

Who are the Directors of the Corporation?

Directors are individuals who are elected by the shareholders (and, as such, are accountable to the owners of the corporation). The articles of incorporation specify the maximum and minimum number of directors there can be and the by-laws generally have provisions in place for things like director vacancies (e.g. by death, resignation, etc.). Directors meet every so often to decide on long-term strategy and evaluate the progress of the corporation. They themselves delegate decision-making on a daily or more routine basis to the officers of the corporation. Directors are responsible for declaring and paying out dividends to shareholders and get involved in important corporate matters.

Who are the Officers of the Corporation?

Officers are individuals appointed by the directors (and, as such, are accountable to them). They manage the day to day affairs of the corporation. They have titles like CEO, President, Treasurer, Vice-President, CFO, Secretary, etc. but these are just titles and there’s no formal requirement that they have a particular title. The duties and responsibilities of the officers are generally spelled out in the corporate by-laws and more specifically spelled out in an employment contract.

Is a witness required to sign?

There is no legal requirement that a witness sign the Certificate of Incumbency in order for it to be valid.

DMC