A Certificate of Good Standing is a one-page endorsement document that’s provided by the Secretary of State and offers conclusive evidence of the status of your business entity. The document is also known in other states as a Certificate of Existence, Certificate of Authorization, or a Certificate of Status.
An entity that was initially formed in its State of Formation can be issued a certificate of good standing, as can be an entity that was registered in another state as a foreign entity.
Procuring a Certificate of Good Standing is similar to obtaining an individual ID card, which proves that your business is formally registered and authorized to operate in the state of organization. It also indicates if your business does or not owe taxes.
Not every business entity needs to have a certificate of good standing, but this document helps to establish your company as a legitimate venture and legally authorized to conduct business. It verifies that your business is in compliance within the State of Formation and therefore is in “good standing”.
Since not all types of business entities are required to be register with the state, not all types of entities will be able to get a certificate of good standing.
A certificate of good standing typically has an expiration date, which is generally when the registration is due to be renewed, or when periodic documents or registration fees are due. This could be at the end of a calendar year, or at some other time during the year when the state’s laws dictate the renewal or periodic filings.
Note: A certificate of good standing is not the same as a business license or permit, which must be obtained in order to legally conduct business. Additionally, a company can lawfully conduct business in its state of formation, without obtaining a certificate of good standing.
Sole Proprietors are not required to register in any state, and you will not need to be worried about a certificate of good standing. However, all states require legal formation of corporations and limited liability companies (LLCs).
Many types of business entities are required to be registered in some states, while others are not in other states. This includes partnerships, limited partnerships, limited liability partnerships (LLPs), and limited liability limited partnerships (LLLPs). If your business is organized as one of these entities, your state’s laws will determine whether or not registration is required.
Certificate of Good Standing are obtained from the state agency where your business was registered. In most states, this is the secretary of state, or one of its subdivisions. These agencies go by different names in the following states:
Alaska: Department of Commerce, Community and Economic Development
Arizona: Arizona Corporation Commission
Delaware: Division of Corporations
Hawaii: Business Registration Division, Department of Commerce and Consumer Affairs
Maryland: Department of Assessments and Taxation
Massachusetts: Corporations Division, Secretary of the Commonwealth of Massachusetts
Michigan: Corporations Division, Department of Licensing and Regulatory Affairs
New Jersey: Division of Revenue and Enterprise Services, Department of the Treasury
Utah: Division of Corporations and Commercial Code, Utah Department of Commerce
Virginia: State Corporation Commission
Washington DC: Corporations Division of the Department of Consumer and Regulatory Affairs.
Wisconsin: Department of Financial Institutions
In most cases, a business only needs to provide a certificate of good standing, when it’s asked for.
You’d be asked one by an individual or an organization with whom you have some type of business relationship. Like when you need to open a business bank account, apply for credit in the business name, or setting up an online or in-person point of sale terminal (POS) to accept credit or debit card payments. Or when applying to be registered to do business as a foreign entity in another state.
Let us know when you need proof of Good Standing and we’ll handle the paperwork for you, to obtain a copy of your Certificate of Good Standing. We help you to have a peace of mind, knowing that you’re able to open that business bank account, apply for credit in the business name, set up your POS, or help with qualifying to operate as a foreign entity in another state.