Definition and Importance
A certificate of good standing is official certification from Kansas that a company is legally registered and following all rules. It demonstrates to lenders, investors, or partners that a company is trustworthy and credible, facilitating business growth. This certificate is often needed for financing.
Validity and Eligibility
The certificate certifies a company’s proper registration, current status on fees and filings, and its legal authority to operate. The period of validity varies based on individual circumstances, with many certificates lasting between 60-90 days.
Eligible business structures for obtaining a certificate include corporations and LLCs, while sole proprietors generally do not qualify. The Secretary of State usually manages the issuance of certificates, with costs typically below $50.
Uses and Renewal
Reasons for obtaining a certificate of good standing include:
- Ensuring eligibility for financing from lenders.
- Proving business legitimacy for opening bank accounts and entering contracts.
- Meeting partner requirements for doing business.
You may need to renew the certificate annually or after major business alterations.
Acquiring a Certificate
Getting a certificate across different states involves:
- Verifying that your business structure is eligible.
- Requesting the certificate through the appropriate state office, such as the Secretary of State.
- Expecting to pay a fee, generally under $50.
For businesses in the UK, this documentation is obtained through Companies House. The process verifies the compliance of the business with all state laws and requirements.
Businesses may require this certificate when expanding into new states, demonstrating legitimacy for banking purposes, or entering formal agreements.