A letter of good standing refers to a certificate issued by a state’s Secretary of State office. It verifies that a registered business has complied with all of the state’s rules for conducting business in that state. “Good standing” means that a company is up to date on filing its state reports, obtaining its state licenses and permits, paying its state taxes and fees, and complying with other statutory rules for operating the business entity.
It is to ensure authorization of claims from employees against the Compensation Fund.
A letter of good standing may also be issued by an academic institution, proving that a student is not on academic probation and is successfully completing their course requirements.
This article aims to guide you through the process of writing an impressive good standing letter that will help establish your credibility and positive image in the minds of others.
What is a Certificate of Good Standing?
A letter of good standing or a certificate of good standing is a certificate issued by the Secretary of State or equivalent body confirming that a business entity is duly registered and complies with the state rules to operate its business. According to the Cambridge Dictionary, a certificate of good standing is defined as “an official document that proves that a company exists, does not owe taxes, and is legally allowed to do business in a particular area."
Academic Standing and Credit Guarantees
What does a letter of good standing mean? It is an official statement of a business’ ability to meet with the various requirements of the act.
Students often use a letter of Good Standing to confirm their academic and immigration status with various authorities.
Understand the definition of a standby letter of credit; it is a guarantee of payment from a financial institution, like a bank, to a beneficiary, should the applicant fail to meet the obligations of the agreement.
Business and Legal Entities
To obtain a Good Standing Certificate your company must be:
- Registered as a legal entity in your state.
- Not in default of corporate rules or suspended by the state.
- Current on all tax filings and obligations (certificate will be issued only if the taxpayer is in full compliance).
Requesting a Letter of Good Standing
Businesses must request a Certificate of Good Standing from the state’s Secretary of State or equivalent office that is responsible for filing entities and maintaining business records in the state. Many states have an online form for requesting a Letter of Good Standing. Alternate methods often include sending a written form by fax, email, or by snail mail.
CorpNet can assist clients with obtaining their Letter of Good Standing promptly.
Academic and Immigration Status
A letter of Good Standing is designed to inform any inquiring parties of your current academic and immigration status, which is commonly used by students to provide confirmation to various organizations.
The certificate verifies that the company filed necessary reports, paid fees, and obtained required licenses and permits. It reflects positively on the business by showing accountability.
Requirements vary by state. Many states allow online requests for the certificate. Otherwise, a written form can be submitted via fax, email, or mail. Third-party services can also assist with this process.
In essence, this credible document establishes an entity’s good standing and authorization to operate. It serves as official confirmation of legitimacy and trustworthiness for potential partners and stakeholders. It is essential for building relationships and enabling business activities that require external validation.