Secretary’s certificate: Overview, definition, and example
What is a secretary’s certificate?
A secretary’s certificate is a formal document issued by the corporate secretary of a company that certifies certain facts or actions taken by the company, typically in relation to the company’s internal governance or official business. This certificate is used to verify the authenticity of decisions, resolutions, or actions that have been made by the company’s board of directors or shareholders. It is commonly used in corporate transactions, such as mergers, loans, or issuing shares, where evidence of the company’s authorization is required.
For example, a secretary’s certificate may confirm that a company’s board of directors approved a resolution to enter into a contract or that the company’s bylaws have been properly adopted.
Why is a secretary’s certificate important?
A secretary’s certificate is important because it provides legal validation of corporate decisions and actions, ensuring that they are in compliance with the company’s bylaws and applicable laws. It is often required in corporate transactions as evidence that the company’s internal approval processes have been followed and that the individual signing on behalf of the company has the authority to do so.
For businesses, a secretary’s certificate helps ensure proper governance and authorization, providing an additional layer of security and legitimacy to corporate actions. It also helps protect against potential legal disputes or challenges to the validity of corporate actions.
Understanding a secretary’s certificate through an example
Imagine a company is entering into a loan agreement with a bank. The bank requires a secretary’s certificate to confirm that the company’s board of directors has authorized the loan agreement and that the company’s corporate records show that all necessary steps were followed. The secretary prepares and issues a certificate stating that the board passed a resolution approving the loan and that the individual signing the agreement on behalf of the company is authorized to do so.
In another example, a company might be issuing stock to investors and needs to provide a secretary’s certificate to confirm that the board of directors has approved the issuance and that the company’s articles of incorporation permit the issuance of the stock.
An example of a secretary’s certificate clause
Here’s how a secretary’s certificate clause might look in a contract:
“The Secretary of the Company hereby certifies that the attached resolution of the Board of Directors of the Company is a true and accurate copy of the resolution adopted by the Board on [Insert Date], and that such resolution is in full force and effect. The undersigned further certifies that [Insert Name], the person executing this Agreement on behalf of the Company, is duly authorized to do so under the Company’s governing documents.”
Conclusion
A secretary’s certificate serves as a formal confirmation of a company’s internal decisions and corporate governance, providing legal assurance that actions taken by the company have been properly authorized. It is an essential document in many corporate transactions, ensuring that all internal procedures have been followed and that the company is acting within its legal authority.
For businesses, preparing and issuing a secretary’s certificate is an important step in ensuring compliance with corporate governance requirements and protecting against challenges to the validity of corporate actions.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.