A Limited Liability Company (LLC) is a business organization that is less rigid than a corporation. An owner or partnership that forms an LLC receives personal asset protection, is required to file less paperwork, and is free to take on as many business members as desired.
LLC Perks And Incumbency Requirements
If you are ready to become your own boss, you may have contemplated forming an LLC. An LLC can be operated by one or more people. An LLC allows someone to begin their journey to success, without being burdened with the strict requirements associated with opening a formal corporation. Tax laws are more lenient through an LLC, and plenty of flexibility is offered to allow an LLC owner or partner to operate their business in the manner they wish.
There is an incumbency requirement, however. A certificate of incumbency is a legal document that outlines who is in charge of operating a business. This type of document protects you and those who you do business with. A certificate of incumbency may be reviewed when forming a business deal that will involve the exchange of goods or services.
If someone were to falsely represent your company and attempt to forge a relationship with a client, the deal would be null and void. A certificate of incumbency is proof that only those listed on the document are able to conduct business deals.
Once you become the owner or partner of a newly-formed LLC, you may want to consider opening up a business checking account. A checking account is vital in keeping your personal and business transactions separated. Access to an account will allow you to cash checks that your clients have provided you with, pay your vendors, and handle your payroll needs. A banking institution may require a certificate of incumbency.
Being able to retrieve the original copy when needed is important. Once a new certificate of incumbency has been acquired, it should be placed within a protective sleeve. A company's secretary or another staff member can prepare the certificate. A business owner can choose to have a certificate of incumbency notarized, but this is not necessary.
A company's seal can be added to a certificate. During an initial meeting with a bank representative, the certificate may be requested. A bank representative will review the certificate and may check the signatures against the actual signatures of you and your partner.