What is a Certificate of Good Standing?
A certificate of good standing shows a business is legally registered and able to operate in Arkansas. You must legally register with the state to receive it. It verifies you are a compliant on all filings, fees and business requirements. LLCs and corporations must register with the state to obtain it.
It shows the official existence of a registered entity and that it complies with state laws. Most states use the term certificate of good standing.
You may need it to open a bank account, enter contracts or do business in another state since it shows your business is legitimate. You typically renew it yearly after significant business changes.
The validity period depends on the situation. Often, requesting agencies or states determine validity, commonly certificates last 60-90 days.
Eligible structures include corporations and LLCs. Sole proprietors often don’t qualify. Costs are generally under $50. You order it from the Secretary of State.
Certificate of Good Standing in the UK
For UK businesses, it is requested from Companies House. It shows the business is compliant. Anyone can request the certificate.
How Does a Certificate of Good Standing Work?
A certificate of good standing is official certification from the state that a company is legally registered and following all rules. It shows lenders, investors, or partners that a company is trustworthy and credible, helping it expand. Lenders often require this certificate before financing.
Reasons to Get One:
- Lenders demand to see it for financing.
- It proves legitimacy.
- It allows opening bank accounts.
- Partners may require it.
What’s Included:
A certificate of good standing certifies a company is properly registered, up-to-date on fees and filings, and legally permitted to operate. It confirms registration, tax payments, and compliance.
It has names like certificate of existence, compliance, or status. But all refer to the same documentation.
Getting a Certificate:
Eligible structures include corporations and LLCs. Sole proprietors often don’t qualify. Each state handles certificates through the Secretary of State. Costs are generally under $50.