This week, our ABC’s for business focus on the kind of standing your company is in, specifically keeping it in good standing. Good standing is defined as the status of a firm which is current with the payment of statutory dues and filing or required periodical reports. Keeping your company within good standing is absolutely necessary to your business and a big responsibility for any entrepreneur to take on.
Sometimes some proof of said standing is necessary, which is where a little thing called a certificate of good standing, or tax compliance, comes into play. This certificate is issued by a state official as evidence that your corporation or LLC exists and is authorized to transact business within the state as well as to make sure that you are running your business by the rules and regulations required by the law.
Here are some instances when a certificate of good standing would be needed:
- qualify/register as a foreign entity in a state other than your formation state
- obtaining financing
- selling your business
- renewing a license
- perform business transactions and contracts
- ensure that the state has received all fees, taxes and any penalties owed
- ensure that “ Articles of Dissolution ” have not been filed with the state.
- open a bank account
So how does a business go about staying in good standing? Well, the best and easiest way is to utilize a cloud storage service like MyCorpVault, which keeps all of your legal documents, corporate minutes, and additional paperwork organized, secure and available at any time all in one place. Being in good standing is about being on top of your paperwork, and the Vault makes that a breeze with organization tools and an easy interface to work on!
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