Do Hong companies require a Certificate of Incumbency?
7 minute read
Anyone who owns a Hong Kong company knows how much paperwork it involves. There are numerous forms that need to be filled out, some optional, while others are mandatory and depend on the type of business structure you own.
Even if you have spent years in the business world, you’re probably still overwhelmed by all of the documents that exist – most of which you probably haven’t heard of until recently.
One of these very important but not so well-known official document is the Certificate of Incumbency, which is a very important Hong Kong company certificate. It is necessary for some situations like when opening a bank account.
Certificate of Incumbency
A Certificate of incumbency, also sometimes known as an Incumbency Certificate, is a legally binding document. In it, you need to list the names, roles, and titles of all the key individuals (directors and shareholders) of a corporation or Limited Liability Company (LLC).
If these key leaders (shareholders and directors) aren’t listed in the certificate, it will be difficult for them to initiate or implement a legally binding agreement.
In the document itself, you will find wording similar to this:
“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.”
Finally, it would list out all of the names of the people and titles, their signatures, and the final signature would be of the company secretary.
Uses of Certificate of Incumbency
One of the most common uses of a Certificate of Incumbency is for setting up a company’s bank account.
A bank can request it when you try to open financial accounts so they can verify the identity of the person who is opening the business account and if they have the authorization to do so. Banks also use it to verify the accuracy of all provided documents and approve a major transaction.
The Incumbency Certificate is also used when bringing on legal counsel so they could know the identity of the person they’re establishing the relationship with. Additionally, they can use the document to find out who the company’s main decision-makers are.
And finally, companies use this certificate when making overseas deals.
Does your business need it?
There are multiple instances when a business absolutely needs a Certificate of Incumbency. So does your business need it?
The answer is yes if:
- You’re starting up your company and are trying to acquire financial services or open a bank account.
- You’re looking to hire legal counsel.
- You want to do business overseas.
Obtaining a Certificate of Incumbency
For your Hong Kong company to obtain a legally active Incumbency Certificate, it first needs to issue the document. Usually, the company secretary will create a draft of the Certificate of Incumbency and then attach the corporate seal or insignia to the document.
The next step is to notarize the document and that can be done by a public notary. The laws for the Certificate of Incumbency differ from area to area, so you need to do research on the requirements for your specific location before you draft the document.
When you’re writing down the names of every officer and director in the company and the titles they hold, you also need to include a few more things. State if the people listed in the document were elected or appointed to their positions and how long the terms for those positions last.
Finally, the document needs to be signed by all the listed members so it can gain validity.
There are a few other elements that might need to be added to your Certificate of Incumbency based on the type of business you operate. If you aren’t completely sure about what needs to be included, you should speak to a professional law expert before your company applies for a Certificate of Incumbency.
Frequently asked questions
There are a few questions that people often ask related to the Certificate of Incumbency, so let’s go through them.
Who can issue a Certificate of Incumbency?
The Certificate of Incumbency including other Incumbency Certificates such as certificate of officers, register of directors, or secretary’s certificate, all provide the same information and are issued by the same registered agent.
That person is the corporate secretary and when they issue the certificate, they also need to include the corporate seal and get the document notarized by a public notary.
Since the company secretary is in charge of keeping all the company records and the Incumbency Certificate is an official act of the company, they need to have the document issued. This way, all third parties can be sure that the document is accurate and reliable.
A Hong Kong company Certificate of Incumbency contains all of the important and relevant information regarding the company directors and officers as well as the registered office address.
This includes things such as:
- The full names of all the directors and officers who work for the corporation
- Whether the listed incumbents were elected or appointed to their position
- The term of office for each director and officer
Most Certificates of Incumbency also include a signature sample of all the relevant parties that can be used for comparison purposes and the prevention of fraud and identity theft.
Does a certificate of incumbency expire?
You’ll be happy to know that a Certificate of Incumbency doesn’t expire, but there will be periodic requests for you to prove that your certificate is no older than three months.
Who should sign a certificate of incumbency?
Usually, this document holds the secretary’s signature since they are the person who issued it and the one who keeps the records.
Aside from their signature, it also needs to be signed by all of the directors and the officers who are listed in the document. The signature of the secretary comes last.
Does a Certificate of Incumbency need to be notarized?
In most cases, a Hong Kong company Certificate of Incumbency needs to be notarized if you want it to be viable for legally binding transactions. The notarization is mandatory if you have the certificate issued by a third party.
Most of the time, the smartest thing to do is to arrange a notarization of the certificate from the very beginning. The only instance that doesn’t require this is if your company’s Certificate of Incumbency is issued by a regulated professional such as a lawyer or a CPA (certified public accountant).
How can Sleek help?
A big issue faced by Hong Kong companies is second-rate secretaries who never do the job right. That is why Sleek provides innovative and efficient company secretarial and governance services.
If you hire a secretary through Sleek, you can be sure that you will get expert support and stay out of legal trouble.
With Sleek’s help, not only will you have the perfect Certificate of Incumbency, but you’ll have nothing to worry about when it comes to your corporate secretary.
Documents and forms are the source of stress for a lot of business owners. If you don’t execute them correctly, you can get into a lot of legal trouble and pay some hefty fines. A Certificate of Incumbency may not be a well-known document, but it’s still an important one.
We hope that you managed to find the answers to some of the questions you had regarding this legal document and that you now know if your corporation needs it or not. If it is a necessary document for you, feel free to contact us and we will help you with it.