What is a Certificate of Good Standing?
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. Lenders often require this certificate before financing.
Eligibility and Costs
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.
What’s Included
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.
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 lenders, investors, or partners that a company is trustworthy and credible, helping it expand. Lenders often require this certificate before financing.
Reasons to Get One:
- Lenders demand to see it for financing.
- It proves legitimacy.
- It allows opening bank accounts.
- Partners may require it.