What is a Certificate of Good Standing | Get One in Your State

Who Issues the Certificate of Good Standing

Certificates of Good Standing are typically issued by the state government, and they can be used to demonstrate compliance with various regulations. 

For example, many banks require businesses such as LLCs, corporations, LLPs, etc., to have a Good Standing certificate before opening a business account.

Obtaining a Certificate of Good Standing is usually a simple process, and it can be obtained online or by mail. Some states charge a fee for the certificate, while others provide it free of charge.

Why You Need a Certificate of Good Standing

Unlike business licenses and permits, the certificate of status is not mandatory to operate your LLC or corporation. However, there are certain circumstances where you might need a Certificate of Good Standing. Here are a few of the most common:

• You are opening a business bank account
• You’re applying for a business loan or line of credit from a bank
• You’re trying to lease commercial space
• You are soliciting funds from potential investors
• You want to register your LLC or other business in another state as a foreign or out-of-state LLC
• You want to transfer or domesticate your business to another state
• You’re selling your business, and the buyer wants proof that the company is in good legal standing
• You are contracting with another company
• You need to show compliance with government regulations in any other situation

If you’re not sure whether you need a Certificate of Good Standing, it’s always best to check with the concerned authority you are dealing with at that particular time. They will be able to advise you on whether this document is required for you or not.

Documents Needed to Apply for Certificate of Good Standing

Different states have different rules for business entities. So, the specific documents you’ll need to apply for a Certificate of Good Standing vary by state, but they typically include:

• The company’s Articles of Incorporation in case of S or C corporation or the corporation’s registration number
•  Certificate of Formation in case of LLC or the company’s registration number
• The company’s most recent annual report
• A resolution from the board of directors authorizing the application for a Certificate of Good Standing
• The application fee (if applicable)

Once you have all the required documents, you can begin the application process.