If you’re in the process of trying to understand the certificate of incumbency meaning, there’s a good chance you’re in the process of opening a new bank account.
In fact, a certificate of incumbency is a common request from banks around the world when foreign companies request to open an account.
So it can often come up when people are trying to navigate how to open a business bank account in places like Cyprus, Cayman, Isle of Man, and elsewhere.
In this article, we will discuss the purpose of the certificate of incumbency. Not to mention, how it compares to other official documents, including certificate of good standing and corporate resolutions.
Feel free to use the table of contents to jump ahead to any sections that are immediately relevant to your search.
Table of Contents
What Is a Certificate of Incumbency?
Certificate of incumbency lists the names of officers, directors, and members of a company. This document is then used to identifies the specific individuals who are authorized to enter into agreements and effectively make decisions that are legally binding.
When Is an Incumbency Certificate Required?
A certificate of incumbency is often a requirement when a corporation is entering into an agreement. It’s also required when establishing a new financial relationship like opening a bank account or entering commercial partnerships.
In other words, this type of certificate confirms that the person executing on behalf of the company has the authroization to do so.
This is especially important when a company is registered in a jurisdiction that does not have a publicly available registry that lists the identities of members or shareholders and directors.
An example of a jurisdiction without a public registry would be BVI, though this is changing. Alternatively, certain jurisdictions have complete public registries where information about the shareholders and directors is easily accessible to the public. The United Kingdom’s public registry is the clearest example of this.
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Frequently Asked Questions
Below are two common questions that we receive from people looking to understand what a certificate of incumbency is. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
Is a Certificate of Incumbency the Same as a Corporate Resolution?
No, a certificate of incumbency is an official list of the members, shareholders, and directors in a company that have the authorization to execute legally binding agreements on behalf of the company. On the other hand, a corporate resolution is a document that relates to the specific action that a corporate entity has resolved to take, such as opening a bank account.
What Is the Difference Between a Certificate of Good Standing and a Certificate of Incumbency?
A certificate of good standing is an official document. It shows that the company in question is up to date with its legal obligations. This can include taxes, corporate fees, annual reporting obligations, and more. On the other hand, it is an official document that lists the members, shareholders, and directors of a company that have the authorization to execute legally binding agreements on behalf of the company.
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