A certificate of good standing goes by a few different names. This document may also be referred to as a certificate of existence or a certificate of status. The name may differ depending on the state of incorporation, but this document provides LLCs and corporations with several benefits.
What Does a Certificate of Good Standing Do?
Before you file for a certificate of good standing, it’s important to understand the meaning of this term. Good standing is defined as the status of a business that is up-to-date with their statutory dues and any required filings or reports.
A certificate of good standing is proof, as issued by a state official, that your LLC or corporation is in compliance. It has met its statutory requirements and is authorized to do business in its state of formation.
Having a certificate of good standing provides proof that a small business has fulfilled the following formalities in its state:
- Up-to-date on paying all state taxes and fees including franchise taxes.
- Submitted all required reports and filings.
When Do LLCs and Corporations Need a Certificate of Good Standing?
Here are a few circumstances where it’s necessary to have a certificate of good standing:
- Obtaining financing with potential lenders.
- Opening a business bank account.
- Renewing specific business licenses or permits.
- Establishing systems that allow the business to process credit or debit payments.
- Competing for a government contract.
- If a business entity wishes to conduct business in a state outside their formation state. They would need to include their original certificate of good standing when filing for a certificate of authority before registering to do business.
- Selling a business.
- Entering into, and performing, business transactions and contracts.
- Ensuring that the state has received all fees, taxes, and any other penalties owed.
- Ensuring articles of dissolution have not been filed with the state.
- For the personal records of the business. It is not mandatory that small businesses have certificates of good standing. However, it is helpful to have this document handy to ensure proof of your company’s existence.
What’s in a Certificate of Good Standing?
The following information should be included on a state-issued certificate of good standing.
- The name of the company.
- A statement that says your business is incorporated and authorized to do business in that state.
- Ensuring that all fees, taxes, and any applicable penalties owed to the state have been paid.
- The company’s most recent annual report has been filed.
Certificate of Good Standing: What Else Should I Know Before Filing?
Before you request a certificate of good standing in your desired state, keep the following filing aspects in mind.
- Determine if your entity formation is registered with the state. Corporations and LLCs are registered with their respective states. Other entities, such as limited liability partnerships (LLPs) and limited partnerships (LPs), may need to register with the state before they can file for a certificate of good standing.
- You may have to pay a filing fee. This varies on a state to state basis. Some Secretary of State offices, like Colorado, do not charge a fee to file for a certificate of good standing. Others do, with varying price ranges. This may differ depending on your entity formation. For instance, North Dakota’s Secretary of State charges a $15 filing fee for partnerships with $20 for every other legal structure. There may also be a difference in pricing depending on if you process the payment online or via mail. The Tennessee Secretary of State, for example, charges $20 by mail. Their online filing fee is $22.25. Check in with your local Secretary of State for the exact filing fee.
- Keep up-to-date with your certificate of good standing’s expiration date. Typically, most certificates are valid for up to 90 days. Get in touch with your local Secretary of State to see if your certificate is still valid.
- Some states, like California, allow individuals to drop off their certificate of good standing request in person. If you’d like to do that, reach out to your Secretary of State for more information about walk-in instructions.
Order a Certificate of Good Standing
Short on time and need the help of a third party service for your filing needs? Let MyCorporation order your certificate of good standing. Answer a few simple questions about your business with our team of representatives. We will complete the paperwork for you. Then, we’ll place the order for a certificate of good standing from the Secretary of State so you can get back to focusing on your business.