Reasons for a Letter of Good Standing
A letter of good standing serves as proof of a company’s business compliance status. Business activities requiring this letter include opening a business bank account, attracting investors and lenders, and securing a loan.
Obtaining a Letter of Good Standing
To obtain a letter of good standing, a business must be fully incorporated and request a Certificate of Good Standing from the state’s Secretary of State. Various entities such as LLCs, corporations, LPs, and LLPs can obtain this certificate if they are compliant.
Process of Obtaining the Letter
- Register with the state and request the certificate through the appropriate channels.
- Costs for the letter range from $10 to $50, with expedited processing options available at additional fees.
- The letter is typically issued by the Secretary of State’s office or the agency responsible for business regulation.
What a Letter of Good Standing Includes
A letter of good standing serves as proof of a company’s compliance status with the state. The document allows businesses to open bank accounts, attract investors, and secure loans. However, sole proprietorships are unable to demonstrate good standing as they do not have to register in the U.S.