What is a Letter of Good Standing?
A letter of good standing is a legal document that confirms that your business has complied with your state’s rules and regulations, such as registering a business entity, paying your business taxes, and generally checking all of your state’s boxes. Different states have different terms, so you might also hear this referred to as a certificate of good standing, a certificate of existence, or a certificate of status.
Business Entities Eligible for a Letter of Good Standing
Business entities recognized by and registered with the state can request a Certificate of Good Standing. Generally, this includes:
- Limited Liability Companies
- Limited Partnerships
- Limited Liability Partnerships
- Corporations (e.g., C Corporations, S Corporations, Nonprofit Corporations, Professional Corporations)
What is a Certificate of Status Business?
A Certificate of Status business is a company that has been officially recognized by a government agency as being in good standing. This certificate is generally issued by the Secretary of State’s office and is required for certain types of businesses, such as those that want to bid on government contracts.
How to Get a Certificate of Good Standing in the USA
A certificate of good standing proves a business is legally registered and able to operate in a state. You must legally register with your state to receive it. This document may also be called a certificate of existence or letter of good standing.
Issued by the state, it verifies you are a legally registered entity, up to date on all filings and fees, and permitted to do business in your state. You do not have to obtain one to do business. LLCs and corporations must be registered with the state to obtain it.
It is issued to show the official existence of a registered entity like a corporation or LLC and that it’s legally registered and authorized to operate in the state. Most states use the term certificate of good standing.
You may need it when you want to do business in another state, open a bank account or enter contracts since it shows your business is legitimate. You typically need to renew it yearly, more often if significant business changes.