Certificate of Good Standing
How To Obtain Certificate of Good Standing
Certificate of Good Standing is a certificate issued by the Secretary of State’s (or equivalent agency) evidencing that a business (corporation, LLC, partnership, etc.) has complied with the applicable provisions of the laws of the state, is in good standing, and authorized to transact business or to conduct affairs within the state.
To obtain Good Standing Certificate your company must be:
- registered as a legal entity in your state,
- cannot be in default of corporate rules or suspended by the state,
- must be current on all tax filings and obligations (certificate will be issued only if the taxpayer is in full compliance).
Other names for Certificate of good standing are: “Certificate of Facts”, “Certificate of Existence”, “Certificate of Status”, “Letter of good standing”.
Who Issues The Certificate
Certificates of Good Standing are issued by the Secretary of State (or equivalent agency responsible for filing entities and maintaining state records) in which the entity is formed, or in which it has qualified as a “Foreign Entity“.
What Is It Used For
Business entities use Certificate of Good Standing to prove they are incorporated (organized) and authorized to do business in the state. During the financing process, banks will often require such certificate from a business.
Typically Certificate of Good Standing might be required for the following:
- opening bank account,
- completing an official business transaction or a contract,
- forming Foreign Entity in a different state,
- selling the business,
- to prove that a company has come back into compliance with the state of formation.
If your company fell out of compliance and has not fixed the issues that caused it then obtaining this document will show that your company does exist but is considered “in bad standing” with the state.
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