What is a Certificate of Good Standing?
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. Lenders often require this certificate before financing.
Reasons to Get a Certificate of Good Standing
- Lenders demand it for financing
- It proves legitimacy
- Allows opening bank accounts
- Partners may require it
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 credibility, helping expansion. Lenders often require it before financing.
Getting a Certificate of Good Standing
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.