Certificate of Good Standing
A certificate of good standing shows a company is properly registered with a state and is compliant with state regulations, certifying it is legally permitted to operate. Such a certificate, also known as a certificate of authorization, status, existence, or compliance, may expire when registration is due for renewal.
Purpose and Benefits
This document is often necessary for:
- Applying for loans
- Closing bank accounts
- Entering into contracts
Lenders, partners, vendors, and other stakeholders typically require an up-to-date certificate to ensure a business’s legitimacy.
How to Obtain
To obtain a certificate, businesses must:
- Register properly in their state
- Remain compliant by paying fees and filing reports
Certificates are issued by state agencies, usually the Secretary of State or Department of State, and contain the business name and qualification/incorporation date.
Costs and Process
- Costs are typically under $50
- Turnaround times vary by state
- Some states offer immediate online certificates
- Others take 7-10 business days for mailed requests
Renewal and Compliance
Certificates should be renewed:
- At least yearly
- More often after major business changes
In summary, certificates of good standing are essential for registered entities like LLCs and corporations to prove their legal status and compliance, enhancing their credibility and facilitating various business transactions.