Overview of Certificate of Good Standing
A certificate of good standing is official certification that a company is legally registered and compliant, demonstrating trustworthiness to lenders, investors, and partners. It is often required by lenders before financing.
Importance and Application
- Lenders demand it for financing.
- Proves legitimacy.
- Allows opening bank accounts.
- Partners may require it.
Details of the Certificate
A certificate of good standing certifies proper registration, compliance with fees and filings, and legal permission to operate. It confirms registration, tax payments, and compliance. It may be known by different names (e.g., certificate of existence, compliance, status).
Obtaining a Certificate
Eligible structures include corporations and LLCs, while sole proprietors may not qualify. Certificates are handled by each state’s Secretary of State and typically cost under $50. The validity period varies but commonly lasts 60-90 days.