Reasons for Not Being in Good Standing
- A business is not in good standing when it fails to comply with state requirements for reporting and paying fees.
Repercussions of Not Being in Good Standing
- Risks include possible loss of access to courts, difficulties getting loans and financing, tax liens, loss of name rights, and fines and penalties.
Certificate of Good Standing
- A certificate of good standing proves a business is legally incorporated in a state, authorized to transact business there, and has complied with statutory state requirements.
Consequences of Not Being in Good Standing
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If that name is not available when the certificate of restoration of good standing is filed, the limited liability company shall select a new name that complies with section 204.
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A corporation or LLC usually loses its good standing status due to various compliance issues such as a lapse in annual report filing or non-payment of franchise taxes.
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To be in “good standing” generally means your business has met all of its legal obligations in the state where you operate.
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Only business entities that are active can have a good standing status, so a business that has been voluntarily terminated will also show “not in good standing” because it is no longer active.