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.
Reasons to Obtain a Certificate
Reasons to consider a certificate include:
- Lenders demand to see it for financing.
- It proves legitimacy.
- It allows opening bank accounts.
- Partners may require it.
What’s Included in the Certificate
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
- Compliance
It may be known by different names, such as certificate of existence, compliance, or status, but all refer to the same documentation.
Validity and Eligibility
The validity period depends on the situation. Often, requesting agencies or states determine validity, but commonly certificates last 60-90 days.
Eligible business structures include corporations and LLCs. Sole proprietors often don’t qualify. Each state handles certificates differently, usually through the Secretary of State office. Costs are generally under $50.