What is a Certificate of Good Standing?
A Certificate of Good Standing (also known as a Certificate of Existence or Certificate of Authorization) is a document issued by a state official as conclusive evidence that a C corporation, S corporation, limited liability company (LLC), limited partnership (LP), limited liability partnership (LLP) or nonprofit corporation is in existence or authorized to transact business in the state and has satisfied all the requirements imposed by that state as of a specific date in time.
The Certificate of Good Standing sets forth:
- Your company’s name
- That your company is incorporated and authorized to do business in that state
- That all fees, taxes and/or any applicable penalties owed the state have been paid
- That the company’s most recent annual report has been filed
- That Articles of Dissolution have not been filed
Why would I need a Certificate of Good Standing?
Businesses often must obtain a Certificate of Good Standing before undertaking certain filings in a new state, such as a foreign qualification (registering to transact business), or before completing official business transactions or contracts, such as license renewal, selling the business or obtaining financing.
The document may also be used to prove that a company has come back into compliance with the state of incorporation or qualification. However, if you have not fixed the underlying issues that caused your company to be out of compliance in that state, obtaining this document will show that your company does exist but is considered “in bad standing” with the state.
How soon can I expect to receive my Certificate of Good Standing?
The processing times and procedures vary greatly by state. Standard processing may take 4 to 6 weeks. You may select expedited processing ($60 + state fees) to typically receive your Certificate of Good Standing in 7 to 10 business days. To find out about the typical turnaround time for your particular state, contact our Incorporation Specialists.
A Certificate of Good Standing is typically required when you want to register your corporation or LLC to transact business in another state. We obtain a Certificate of Good Standing for you as part of our Foreign Qualification Service.
Foreign Qualification Service
Keep in Mind
If your company is not in good standing with the state when a Certificate of Good Standing is requested, the state will often return a document stating that your company is in existence but is in “bad standing,” which can have a negative impact on your business.